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Dods Group swings to loss and urges caution
29th Oct 2019 10:27
(Sharecast News) - Dods Group on Tuesday swung to an interim loss before tax after higher costs outweighed the impact of a jump in revenue, with the company remaining cautious on its outlook.
The media and events company booked a loss before tax of £0.3m for the six months ended 30 September, compared with a profit of £0.4m in the same period last year, as cost of sales increased by 33% to £8.3m.
Gross margin dropped from 42% to 34% in the period, which the AIM-traded company attributed to a change in the product mix following the acquisition of Meritgroup Limited on 18 July and increased venue and delivery costs.
However, the addition of Merit helped sales climb by 17% to £12.5m.
The company's integration of its new acquisition, which it snapped up for £22.4m, is reportedly proceeding well and remains on track to realise annual synergies of £0.5m.
While Dods said its results were in line with expectations and acknowledged that it will benefit from an 8-month contribution from Merit, the company warned that it remains cautious in its second half outlook due to the current political and economic environment.
Chairman David Hammond said: "The group continues to deliver quality products and services in a challenging environment. The addition of Merit has enabled us to diversify and increase our recurring revenue base. Notwithstanding the current cautious outlook, the board views the group's medium to long-term prospects with confidence."
Dods Group shares were up 1.96% at 6.50p at 1004 BST.
The media and events company booked a loss before tax of £0.3m for the six months ended 30 September, compared with a profit of £0.4m in the same period last year, as cost of sales increased by 33% to £8.3m.
Gross margin dropped from 42% to 34% in the period, which the AIM-traded company attributed to a change in the product mix following the acquisition of Meritgroup Limited on 18 July and increased venue and delivery costs.
However, the addition of Merit helped sales climb by 17% to £12.5m.
The company's integration of its new acquisition, which it snapped up for £22.4m, is reportedly proceeding well and remains on track to realise annual synergies of £0.5m.
While Dods said its results were in line with expectations and acknowledged that it will benefit from an 8-month contribution from Merit, the company warned that it remains cautious in its second half outlook due to the current political and economic environment.
Chairman David Hammond said: "The group continues to deliver quality products and services in a challenging environment. The addition of Merit has enabled us to diversify and increase our recurring revenue base. Notwithstanding the current cautious outlook, the board views the group's medium to long-term prospects with confidence."
Dods Group shares were up 1.96% at 6.50p at 1004 BST.