29th May 2018 11:01
LONDON (Alliance News) - Shares in IDOX PLC dropped sharply on Tuesday after it said it expects full-year earnings to be below market expectations and will suspend its interim dividend, following from the closure of its loss-making Digital division.
Shares in the information management services provider fell 15% to 33.14 pence midday Tuesday.
In addition, IDOX said it has appointed David Meaden as chief executive officer, with effect on Friday this week.
Meaden's most recent role was at specialist software provider Northgate Public Services, where he spent 12 years as CEO and 22 years in the company itself from 1994 to 2016.
"We are delighted to have secured such as high-calibre leader as David Meaden as IDOX's new chief executive. His previous experience with the UK public sector and software development at Northgate Public Services, where he was until recently chief executive, is especially relevant," said Chairman Laurence Vaughan.
IDOX said that adjusted earnings before interest, tax, deprecation and amoritsation for the year to the end of October is expected to be in the range of GBP13.0 million to GBP15.0 million, compared to market expectations of GBP22.8 million and down from GBP18.5 million the year before.
In the first half of the year, Ebitda is expected to be GBP1.0 million, down from GBP10.3 million.
The drop is due to a completed operational and financial review of the business, leading to the closure of the Digital division and alterations to the Engineering segments, IDOX also is agreeing revised contractual terms as part of its adoption of International Financial Reporting Standard 15 for the next financial year.
IFRS15 governs the recognition of revenue from contracts with customers.
"The major review and actions taken reflect our commitment to deal decisively with the issues faced by the group during the last year. Despite the impact on our financial performance this year, this necessary programme of change has positioned the group to deliver an improved performance in future financial years," Vaughan said.
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