5th Nov 2019 11:09
(Alliance News) - Castleton Technology PLC on Tuesday said it expects its earnings to show a "material improvement" in the second half of the year after reporting a challenging interim period.
Shares in the software and managed services provider were 17% higher at 73.50 pence each in London on Tuesday morning.
In the six months to September 30, Castleton reported a 10% year-on-year revenue fall to GBP11.6 million from GBP12.9 million. The company attributed this to a fall in one-off revenues.
Castleton sunk to a pretax loss of GBP199,000 from GBP497,000 pretax profit last year.
Earnings before interest, taxation, depreciation and amortisation were marginally lower year-on-year at GBP2.3 million from GBP2.4 million.
Castleton said: "The company is confident that revenue, Ebitda and cash generation will show a material improvement in the second half of the year."
The company added that it has reorganised its units to streamline its sales and delivery functions.
The firm explained: "To create a truly 'one Castleton' structure, the decision had been made to merge the Software Solutions and Managed Services divisions, so that the single entity is able to deliver a unified, seamless and enhanced customer experience."
"The benefits are taking longer to materialise than we anticipated," Castleton explained.
Chair David Payne added: "The first six months of financial year 2020 has been challenging, particularly compared to the strong comparable period last year. This was primarily due to a decline in one-off revenues and the reorganisation of the business taking longer to embed than first anticipated."
Castleton also said that its Chief Executive Dean Dickinson purchased 34,750 shares in the company at 67.60 pence each, GBP23,491 altogether.
Dickinson now has an interest in 219,750 Castleton shares, representing a 0.3% stake in the company.
By Eric Cunha; [email protected]
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