24th Jan 2020 09:49
(Alliance News) - Shares in GETECH Group PLC plunged on Friday as the group expects results for 2019 to be below market expectations, due to not being able to finalise sales negotiations on time.
Shares in the Leeds-based geoscience and geospatial products firm fell 19% to 20.65 pence on Friday in London, having hit a low of 19.44p.
For the recent year, earnings before interest, tax, depreciation and amortisation is set to be between GBP600,000 and GBP800,000, reflecting a 27% to 45% decline from GBP1.1 million in 2018.
Revenue is expected to be GBP6 million, representing a 25% fall from GBP8.0 million. This was due to negotiations on several substantial transactions overrunning from December. These sales had been expected to deliver material revenue growth.
Looking further ahead however, GETECH closed GBP2.4 million in forward sales, up 41% from GBP1.8 million in 2018. A significant portion of these sales are expected to unwind to revenue in 2020. The group's orderbook grew by 48% to GBP3.1 million.
"GETECH began December 2019 financially ahead year-on-year and with a high-value sales pipeline that was commercially well-advanced. The shortfall in 2019 revenue is therefore disappointing. Alongside the growth delivered in 2018, this highlights how GETECH's earnings remain exposed to lumpy transactions, the exact timings of which can be difficult to influence," said Chief Executive Officer Jonathan Copus.
"We are however strategically driving significant growth in our orderbook to progressively lessen this exposure. We also work to protect GETECH and its profitability from year-end risk through careful capital management," Copus added.
GETECH will publish its annual results in April.
By Dayo Laniyan; [email protected]
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