4th Dec 2015 07:50
LONDON (Alliance News) - Escher Group Holdings PLC Friday warned its full year earnings will impacted after the company said it will not complete some licence sales that it expected to close in the second half of the year, but said its results will still be an improvement on last year.
The provider of software to the postal, retail and financial industries said it will not close several anticipated licence sales before the end of the year, but did not state whether the sales would be pushed into 2016 or have been lost altogether.
"It is disappointing to have to report a shortfall in new license revenue which has restricted the strong growth in adjusted earnings before interest, tax, depreciation and amortisation year-on-year," said Chief Executive Liam Church.
As a result, Escher said revenue for the full year to end December 31 is expected to come in at around USD22.0 million, which is still slightly up from the USD21.0 million reported in the last financial year.
On a constant currency basis, full year revenue will be USD23.0 million compared to that USD21.0 million a year earlier.
As a result of the news, revenue from licence sales for the full year will be "materially lower than expectations".
Consequently, earnings will be hit but still materially up from last year but Escher said adjusted earnings before interest, tax, depreciation and amortisation in 2015 will be up by around 80% on the USD2.1 million reported in 2014 - suggesting Ebitda of approximately USD3.7 to USD3.8 million.
Moving forward, Escher believes it has a strong pipeline for 2016 with half of its expected total revenue in the year to come from recurring licence and maintenance customers and contracts, most of which is contracted "for several years", providing the company with some stability.
On a positive note, the company said it has strengthened its balance sheet with net debt to stand at around USD3.1 million at the end of 2015 from USD5.3 million at the end of 2014.
By Joshua Warner; [email protected]; @JoshAlliance
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