17th Jun 2025 10:15
(Alliance News) - RC Fornax PLC lost 50% of its market value on Tuesday, as the recent listing predicted an annual performance below market expectations on a slowdown in customer spend.
The provider of engineering solutions to the UK defence industry said the recent strategic defence review by the government provides "a strong backdrop for potential future demand". However, delayed and reduced spending in the short-term by its customer base has "negatively impacted demand for the company's services in recent months".
"The board now expects that this situation will not unwind immediately and that the impact may be sustained for the next few months while existing and potential customers assess their needs and budgets in light of the findings of the strategic defence review," RC Fornax said.
RC Fornax listed on February 5 at an initial public offering price of 32.5 pence per share. The stock fell 52% to 24.90p each in London on Tuesday morning to sit 20% lower than its IPO price. It came into the trading statement with a post-IPO gain of 58%, however. Shares had closed at 51.50p on Monday.
In April, RC Fornax reported half-year results. Pretax profit in the six months to February 28 rose slightly on-year to GBP561,000 from GBP520,000. Revenue improved to GBP3.8 million from GBP3.6 million.
During the IPO, responsibility for the day-to-day running of the business, sales included, was given to Chief Operating Officer Daniel Clark. Clark is also a co-founder of RC Fornax.
"It has however recently become clear that the newly expanded sales team has not been able to convert a strong pipeline of leads into revenue-generating contracts at the rate expected by the board. This includes the new contracts that, as announced in the company's interim results on 17 April 2025, had been booked as anticipated revenue for FY25, but is now expected to be generated in FY26," the company added.
"The company has therefore proactively undertaken several mitigating actions, including hiring an experienced sales director together with a wider, significant organisational restructuring to provide better alignment between the sales team and its engineering and project delivery capabilities. Daniel Clark will also leave the role of COO and take a career break."
RC Fornax now expects its annual performance to be "significantly below market expectations", with revenue of no less than GBP4.0 million.
"While the board is very disappointed to not meet expectations in the company's first full reporting period following its IPO, it expects the uncertainty created by the SDR to be temporary and remains confident in the company's prospects and longer-term outlook. Recent strategic hires, operational improvements, and renewed customer momentum provide the foundation for future growth that is supported by strong underlying market drivers," it said.
By Eric Cunha, Alliance News news editor
Comments and questions to [email protected]
Copyright 2025 Alliance News Ltd. All Rights Reserved.
Related Shares:
Rc Fornax