4th Jan 2019 12:38
LONDON (Alliance News) - Gresham Technologies PLC on Friday expressed confidence for the year ahead despite cutting its earnings expectation for 2018 on contract delays.
The stock was down 12% on Friday at 60.00 pence a share.
The enterprise software and services company confirmed it has been selected for two strategic high-value projects for its Clareti platform, which delivers data integrity for capital markets firms and corporates to help them with regulatory compliance.
Gresham said its platform has been selected by an undisclosed investment bank to replace legacy vendor technology and address new data integrity and control requirements across the bank. This contract was signed on Monday, the company said.
In addition, Gresham finalised the contract terms with another unnamed investment bank to migrate a legacy vendor implementation to the Clareti platform, with the agreement now expected to be executed in early 2019.
Gresham expects the total software value of both agreements over a five-year period to be in excess of GBP7 million, of which GBP1.8 million will be recognised in early 2019.
The delay in recognising revenue from these projects has negatively impacted 2018 results, the company said.
Gresham now expects revenue for the year to the end of December to come in down 8% year-on-year at GBP20.0 million. Revenue from Clareti, meanwhile, is predicted to grow by 8% to GBP11.9 million year-on-year.
Adjusted earnings before interest, taxation, depreciation and amortisation are expected to total GBP800,000, down 83% on the year prior.
"We are delighted to have won major competitive bids with two of the world's largest banks right at the end of the year, one of which will become the group's largest Clareti win in its history, although we are naturally disappointed that timing issues have negatively impacted our full year results," said Chief Executive Ian Manocha.
"The investments we made during 2018 have positioned us well to capitalise on the opportunity in the market and we remain confident in the profitable growth prospects of the group," added Manocha.
The company expects to publish the results for 2018 on March 12.
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