1st Feb 2024 12:48
(Alliance News) - Made Tech Group PLC shares sank on Thursday following a disappointing trading update, as the company said market challenges will persist in the run-up to the UK general election.
Made tech is a London-based provider of digital, data and technology services to the UK public sector. Shares in the company were down 21% at 10.22 pence each in London on Thursday afternoon.
This came on the back of Made Tech's modest preliminary results for the six months ended November 30. The company said it expects revenue to be around GBP19.1 million for the half year, down 7.3% from GBP20.6 million a year prior.
Current market expectations forecast GBP40.0 million in revenue for the full year ending May 31. In the 2023 financial year, Made Tech earned GBP40.2 million in revenue.
Sales bookings for the period were down to GBP7.9 million from GBP9.0 million, while Made Tech's contracted backlog grew to GBP61.3 million from GBP47.8 million.
During the period, Made Tech won GBP12.6 million in new contracts, slowed from GBP32.6 million a year prior, due to what the company's describes as a "challenging procurement market". Included in these were a 2-year GBP5.0 million contract with Government Digital Service, and an 18-month GBP3.8 million contract with the Ministry of Justice.
Adjusted earnings before interest, tax, depreciation and amortisation are expected to be roughly GBP1.4 million, up from GBP0.5 million for the first half of financial 2023, representing a margin of 7%. This is an increase from a 2% margin a year ago, which Made Tech credits to "an increase in billable utilisation, a reduction of contractor numbers and targeted restructuring initiatives".
As of November 30, Made tech is debt free with GBP7.9 million in net cash, down from GBP8.5 million in May.
Chief Executive Officer Rory MacDonald said: "We have a promising pipeline of new business opportunities, although the market is undoubtedly challenging right now and we expect this to remain so ahead of the general election. The medium term drivers of demand in our market remain strong and we are focused on making further improvements to the business and putting all the necessary building blocks in place to enable us to capitalise on the increase in trading momentum that we expect post the election."
By Hugh Cameron, Alliance News reporter
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