19th Jun 2014 08:06
LONDON (Alliance News) - Shares in Publishing Technology PLC were trading down by almost a third Thursday after it announced that its results for 2014 would be below market expectations, and broadly in line with its results for 2013.
The software and services company said its first half would likely show a loss due to additional product development expenses and deferred revenue, as it attempts to rectify issues with some of its current contracts.
Recently appointed Chief Executive Michael Cairns is undertaking a strategic review of the business with the aim of improving its performance. The review is expected to be concluded shortly ,and the company will announce its findings at its interim results.
In the meantime Cairns has already taken some immediate action, Publishing Technology said, including bolstering the company's implementation resources and upping research and development investment to improve the efficiency of certain products. This has also led to delaying the delivery of some software to clients to make sure it meets standards.
Publishing Technology said these decisions would improve the longer-term outlook for its business at the expense of its current year. GBP600,000 in revenue has been deferred in the half year, and GBP400,000 in extra costs have been added.
However, the company reiterated confidence that a portion of the delayed revenue could be recovered, and alongside its pipeline of contracts, bring its full-year performance in line with 2013.
The company is also looking to secure partners to assist in implementing large projects reliably, as well as widening its geographic reach and bolstering its sales and marketing efforts. It has begun initial discussions with a professional services company about a potential partnership, it said.
Whilst Publishing Technology's short term outlook is glum, it expressed more confidence in its future, saying its future revenue was underpinned by new contract wins and contract extensions, including GBP4 million in new business over the last few months, and supportive trends in the publishing industry.
It said its Chinese joint venture was performing ahead of its expectations, and its Vista, Ingentaconnect and PCG businesses continued to trade well.
Shares in Publishing Technology were trading down 29% at 198.00 pence Thursday morning, the biggest faller on AIM.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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