Baltimore Technologies is today expected to announce at least £20 million sterling (€32.4 million) in cost cuts. There is speculation that the software group may cut more than 100 jobs from its 1,200-strong payroll.

Analysts have warned that if Baltimore comes out with a cost-cuts figure less than the suggested £20 million, it will be badly received by the market as the group might not reach cash profitability before its cash pile - £108 million at end-December - runs out in early 2003.

Davy analyst Mr Barry Dixon said he expected up to £20 million in cost cuts across Baltimore's operations - research and development, sales and marketing, and administration.

Using his new revenue forecast of £108 million for 2001 and £155 million for 2002, Mr Dixon believes Baltimore could reach cash profitability in the fourth quarter of this year. He warned, however: "The gap between cash profitability and running out of cash is too close for comfort. Anything less than £20 million sterling in cost cuts will therefore cause the markets even more discomfort."

Merrion Stockbrokers' Mr John Coolican was in broad agreement but added that Baltimore would need to give an indication that the group was looking at strategic changes to its business. "They need to recognise the fact that the PKI [public key infrastructure] market is a lot different now than it was last January."