22nd Sep 2015 16:20
LONDON (Alliance News) - Publishing Technology PLC Tuesday said it will not achieve its full-year expectations and will make a loss in 2015, adding that Chief Executive Michael Cairns has stepped down with immediate effect.
The announcement comes after a statement back in July when the company said it was on track to hit its full-year expectations.
Publishing Technologies also dealt a further blow to shareholders after it said its cash balance will suffer as a result of the under-performance, only months after clearing all of its debt.
The company, which provides technology products and business development services to the media industry, said the company is now "not expected to meet current market expectations and is expected to produce a loss for the year" because its Advance division is under-performing.
The Advance system supports customers royalties, permissions, editorial, production, online sales and marketing, digital and print distribution.
"All the group's divisions, other than Advance, are either trading in line with or are ahead of expectations," it said in a statement.
However, Publishing Technology said the acceleration in sales in those other divisions experienced in the first half of 2015 is expected to "substantially" slow after a number of pipeline opportunities were delayed and one opportunity was lost.
However, the company stressed that revenue for the year should still be higher than in 2014 and that performance at Ebitda level, although reduced from earlier expectations, will show a "significant improvement" compared to 2014.
"With the exception of the Advance division, the group is trading profitably and has a highly cash generative core business. Its fundamentals remain strong, with an established franchise providing software systems to blue-chip global publishing companies," it said in a statement.
The company said that despite the GBP9 million that was raised in May via a share placing meant to make the company debt free, the company's net cash position will fall by the end of 2015 due to the fall in sales.
Chief Executive Michael Cairns has stepped down "after careful consideration", and has been replaced on an interim basis by Chief Technology Officer David Montgomery.
Additionally, Non-Executive Chairman Martyn Rose has now been made executive chairman.
"While the performance of Advance so far this year has been disappointing, we have taken prompt and decisive action to address the issue and the need to ensure that we have the right leadership to drive sales and profit," said Rose.
Publishing Technology shares closed down 3.4% to 142.0 pence per share on Tuesday.
By Joshua Warner; [email protected]; @JoshAlliance
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