14th Sep 2016 11:29
LONDON (Alliance News) - Sepura PLC on Wednesday warned on earnings for its full financial year, as it announced that its chief executive is taking an extended period of absence.
Shares in Sepura were trading down 52% at 20.94 pence on Wednesday afternoon, following the announcement.
The communications services provider said order intake has been lower than it had expected in recent months due to delays in refresh opportunities in its Device business in a number of its key markets, mostly through budgetary pressures which are extending product lifecycles. In addition, key contract awards in its Systems business have also been delayed.
This will have a "significant impact" on full-year revenue, Sepura said, which means adjusted earnings before interest, tax, depreciation and amortisation could be 60% lower than its previous expectations.
Sepura added that it has sufficient liquidity for its forecast needs, but that the revised revenue expectations may require it to discuss with its lenders a possible waiver of some of its covenants from March next year.
"It has become clear that we will not be able to meet our original adjusted Ebitda target. Realigning and reducing the cost base will help mitigate the impact of lower revenues in the current year. Our strong sales pipeline continues to give us confidence in the group's longer-term prospects," Acting CEO Richard Smith said.
In a separate statement, Sepura revealed that CEO Gordon Watling has received medical advice to take an immediate and extended period of absence, in order to recover fully from injuries sustained in an accident earlier in the year.
Acting CEO Smith is also the company's chief financial officer.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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