21st Oct 2024 12:18
(Alliance News) - Merit Group PLC on Monday said it expects to report a fall in revenue and adjusted earnings in its financial first half, as the conversion of the sales pipeline for new work has fallen short of expectations.
Merit shares dropped 40% to 36.22 pence each on Monday morning in London.
The London-based data technology company said it anticipates reporting revenue of GBP9.3 million in the six months to September 30, down 6.0% from GBP9.9 million a year ago.
Adjusted earnings before interest, tax, depreciation and amortisation are estimated to have fallen 33% to GBP1.2 million from GBP1.8 million.
Merit Group noted that trading of the Dods Political Intelligence business continued to be in line with its own expectations, while Merit Data & Technology revenue fell 8.5% on-year, as projects within the Software & Technology Resourcing division have reached their conclusion.
"Conversion of the sales pipeline for new work has fallen short of expectations with both macro and local factors impacting prospects' willingness to commit to scale IT projects," it said.
For the current financial year ending March 31, Merit expects revenue of around GBP18.5 million, 11% lower than market expectations of GBP20.7 million and down 7.0% from GBP19.9 million a year ago.
Further, it anticipates annual adjusted Ebitda of around GBP2.0 million, about 41% below market expectations of GBP3.4 million, and about half of GBP4.0 million it had reported for financial 2024.
Chief Executive Officer & Chief Financial Officer Phil Machray said: "Clearly the current dip in revenues combined with the additional cost of our investment in sales & marketing will have an impact on profitability in the short-term. Our focus remains on strong operational management, whilst pursuing revenue and earnings growth, and the board remains confident in the longer term outlook of the business."
The announcement came as Merit said Chief Technology Officer Cornelius Conlon will leave the board and company at the Merit's annual general meeting in September next year.
Conlon also is managing director of Merit Data & Technology, which was acquired in 2019. Conlon joined Merit Data & Technology in 2004. He will remain in his role to help transfer responsibilities to his successor.
By Tom Budszus, Alliance News slot editor
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