9th Jan 2020 10:04
(Alliance News) - Maintel Holdings PLC said Thursday it expects lower revenue and adjusted earning before tax, depreciation and amortization in 2019, despite "encouraging progress" in becoming a cloud-first business.
Maintel shares were down 30% in London at 285.80 pence each on Thursday.
In a trading update for the year ended December 31, the communications service provider said it expects revenue of approximately GBP123.0 million, compared to GBP136.5 million in 2018, and adjusted earnings before interest, tax, depreciation and amortization of GBP10.8 million compared to GBP12.7 million.
The company said the protracted delay in the announcement of new public sector procurement frameworks in the UK significantly reduced the number of available bids during the period.
Also, the continued political and economic uncertainty in the run-up to the UK general election in December also resulted in delays to project implementation and the securing of new contracts.
As a result of two of the group's partners losing four contracts between them, managed service revenue to the group reduced faster than expected, Maintel noted.
In recognition of the reduced profit expectations of the company and to maintain balance sheet strength, Maintel has decided to cut its final dividend in half, to 9.8 pence from 19.5p.
Looking ahead, the company expects to deliver low single-digit organic revenue growth in 2020, underpinned by the improved order intake in the fourth quarter and a return of healthier levels of activity in the public sector.
Ioan MacRae, chief executive officer, said: "While our anticipated overall results for 2019 are disappointing, we are very encouraged by the progress against our strategic aim of becoming a cloud-first company."
By Loreta Juodagalvyte; [email protected]
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