20th Feb 2020 11:48
(Alliance News) - Proactis Holdings PLC on Thursday said it expects lower revenue for the first half of its financial year due to a reduction in recurring revenue after the loss or downgrade of contracts in the past two years.
The stock was trading up 10% at 44.00 pence each on Thursday morning in London.
For the six months to the end of January, the spend management firm said it expects revenue of around GBP24.5 million but did not provide an estimate for expected profit. A year before, Proactis had half-year pretax profit of GBP301,000 on revenue of GBP27.7 million.
Proactis said the value of annualised recurring revenue lost in the six-month period stood at GBP800,000 in its core business, with the total lost from its heightened risk accounts at GBP1.2 million.
Separately, Proactis said it continues to work to advance some approaches with respect to its formal sales process announced back in July. It added that although it continues to receive interest from credible parties, it is only engaging with those able to advance rapidly.
It noted that potential bidders were interested in a trading update, with its statement Thursday provides. "The board considers, therefore, that it will be in a position to move forward promptly following this update, but it reiterates that there can be no certainty that any offer will be forthcoming or the terms of any such offer."
Looking forward, Proactis said it expects to return to revenue growth in the second half of its financial year ending July 31, following a "significant" improvement in new business performance, and retention of existing customers. It added that it continues to make substantial progress in relation to the completion of its BePayd product, with deployment of the product expected in February.
bePayd is the company's supplier-paid financial solution, providing accelerated payments to suppliers against invoices approved by buyers.
"We are confident that we will continue to demonstrate significant progress against 2019's performance. Our customer retention rates have improved significantly which is partly due to our increased level of engagement with our customers where we are offering product strategies designed to maintain and, potentially, provide even more value. This, along with our new business performance, has enabled us to deliver substantial net organic growth in annualised recurring revenue in our core business," said Chief Executive Tim Sykes.
Full results are expected to be published on April 29.
By Ife Taiwo; [email protected]
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