Alpha FMC shares sink on weak full-year guidance

7th Feb 2024 07:19

(Sharecast News) - The stock of Alpha Financial Markets Consulting sunk by over a tenth on Wednesday after the AIM-listed financial consultancy guided to a drop in annual profits due to a "more competitive environment" and a slower-than-expected start to some client projects.

Alpha said that adjusted EBITDA for the year to 31 March would likely be in the region of £42m to £43m, shy of the current consensus estimate of £47.6m, according to MarketScreener, and also below the £46.6m reported the year before.

The company also guided to net fee income growth of just 5% for the year, compared with 44% growth last year.

The shares were down 11.2% at 333p by 0927 GMT - their lowest level since October.

"As previously reported, the global consulting market has experienced a more competitive environment during the current financial year and the supply and demand dynamics continue to rebalance," the company said in its fourth-quarter trading update.

Alpha said it is seeing longer sales cycles with trading starting more slowly than planned in January and a number of new client projects now expected to start in the next financial year. It also said it was seeing lower-than-anticipated consultant utilisation in the current quarter.

"While trading is improving in the second half it has not recovered at the pace we envisaged when reporting our interim results, as the market continues to rebalance supply and demand," said chief executive Luc Baqué.

"However, we continue to see improving market conditions and with the group's ongoing strong pipeline, leading expertise, strong propositions and multiple growth opportunities, we remain well positioned for future growth."