23rd Mar 2015 08:32
LONDON (Alliance News) - Marketing company SpaceandPeople PLC said its pretax profit dropped in 2014 as a rise in its cost of sales outpaced revenue growth and said it would slash its dividend, sending its shares lower in early trade on Monday.
The company, which facilitates and manages promotional space for marketing campaigns and retailing in shopping centres and other high footfall locations, said its pretax profit fell to GBP596,000 from GBP1.8 million a year earlier.
Gross revenue dropped to GBP31.6 million from GBP35 million a year earlier, but net revenue increased to GBP15.4 million from GBP14.6 million. However, the company's cost of sales increased to GBP5.8 million from GBP4 million a year earlier, wiping out the benefits of the revenue growth.
The company said 2014 was a "challenging year", with trading conditions deteriorating and resulting weaker-than-expected new business wins in the UK and Germany. Its UK Promotions business, its largest division, saw gross revenue fall to GBP17.4 million from GBP18.1 million, as new revenue from new venues secured in 2013 proving slower than anticipated, despite a stabilisation of sales in the second half.
On the back of the weaker results, the company said it has proposed a final dividend of 2 pence per share, down from 4.1 pence per share year earlier. The company pays no interim dividend.
SpaceandPeople shares were down 17% to 55.50 pence on the news, one of the worst performers in the AIM All-Share.
By Sam Unsted; [email protected]; @SamUAtAlliance
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