Altitude Group plunges on revenue warning

26th Sep 2013 10:32

Information and technology services provider Altitude Group saw its share price plunge close to a third after reporting slower-than-expected first-half recurring revenue generation and warning on full-year results. The group, which is focused on the Software-as-a-Service (SaaS) market, said that the slowdown in recurring revenue generation, which it blamed on a decision to divert resources on to the delivery of large client opportunities, meaning full-year results will come in below expectations. Altogether, revenue climbed 2% in the six-month period, from £2.84m to £2.88m. On an adjusted basis, operating profit fell to £0.1m (H1 2012: £0.26m), while pre-tax losses for the period widened to £0.48m from £0.22m in the corresponding period the previous year. Martin Varley, who is currently Executive Chairman but will soon become Global Commercial Director, said: "We have made steady progress in the first half of the year in developing and delivering client specific contracts that will have a meaningful impact on our Monthly Recurring Revenues (MRR). In parallel, we have invested heavily in the development of our key technology solutions and built customer support and education resources ahead of the curve to ensure the highest levels of customer satisfaction."The first-half results are comparable to 2012, but recurring revenue generation has been slower than expected due to a decision to divert resources on to the delivery of large client opportunities. "Against a background of substantial development expenditure, this [the slower-than-expected recurring revenue generation] is expected to result in the outcome for the full year being materially short of current market expectations."However, he added that the company remained confident of the structural opportunities within the SaaS market and stressed that will be the focus on its technology platforms going forward. NR