12th Aug 2019 11:32
(Alliance News) - Data management platform Maestrano Group PLC said Monday it will be decommissioning its custom banking platforms and instead focus on its distribution and accounting platforms.
Shares in Maestrano plunged 24% in London in late morning trading, dropping to 1.10 pence each.
Maestrano said it has recently delivered a custom platform for an Australian banking customer. However, Maestrano has decided to decommission the platform at the end of August, after "changing its approach" to the market.
"The projected subscriber income from the platform was not a significant part of Maestrano's revenue forecast and accordingly this change will have a minimal impact on revenue outlook for the current financial year," Maestrano said.
The company instead will "concentrate its efforts" on developing its distribution and accounting platforms.
Chief Executive Andreew Pearson said: "We are seeing an established pattern across our industry of banks discontinuing what are termed 'Marketplace as a Service' platforms, where third party applications are offered to bank clients."
He continued: "We now believe that banks assumed a faster digitalization of small businesses than is happening in practice. There remains no doubt in our mind that this digitalization will eventually occur, but we are now taking a conservative view of the timing and focusing on established markets where our technology can add value today."
Maestrano also noted that it is engaged in discussions for "multiple" M&A opportunities. The company stressed the talks "remain at a relatively early stage" and no formal commitments have been made.
The company made clear it has enough cash reserves to support its business plan in 2020.
Chair Ian Buddery added: "This development confirms the decision made in May to explore opportunities to acquire complimentary products and teams, where clear opportunities existed to accelerate shareholder value. We have identified some interesting opportunities and will make further announcements when possible."
Related Shares:
MNO.L