17th Aug 2015 08:20
LONDON (Alliance News) - Ubisense Group PLC Monday reported a wider pretax loss in the first half of 2015 as its revenue was hit by delayed contracts and as it exited from low margin contracts, but said it it confident it will deliver full-year results in line with expectations and will achieve growth in the long term.
The location intelligence services company said it made a GBP7.5 million loss in the six months ended June 30, wider than the GBP2.1 million loss it made in the first half of 2014, as its revenue declined to GBP10.4 million from GBP17.3 million.
Ubisense warned in July that its revenue in the first half would suffer from contract delays within its Solutions division, although on Monday it said that its "good pipeline" of Solutions opportunities should be closed in the second half, including the delayed contracts.
Revenue in the Solutions division fell to GBP5.7 million from GBP8.5 million in the period.
Ubisense said it is undergoing "significant restructuring" to reduce operating costs which had accelerated ahead of revenue growth. It is continuing with its strategy of exiting some low margin consulting services contracts, which although led to a hit on revenue in the first half, is expected to benefit the business in the long term.
"The results for the first half are clearly disappointing. We have continued to execute our shift to software solutions, by exiting the consulting services business in Europe which combined with customer order slippage resulted in a significant revenue decrease in the first half. As a result of our strategic review and significant restructuring activities, headcount reductions and withdrawal from certain markets will result in a sustainable cost base in line with our revenue expectations for the second half," Chief Executive Richard Green said in a statement.
"Having made the investment in our two business lines and developed next generation products over the past three years, whilst building up a blue chip customer base, the group is now better positioned to scale with its strategic partner channels such as Atlas Copco. As a result the group is confident it is in a position to deliver a full year outturn in line with the board's expectations followed by growth in the longer term," he added.
Shares in Ubisense were trading down 5.4% at 105.00 pence Monday morning.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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