Octagonal tanks as subsidiary expected to report sales decline

1st May 2019 13:23

(Sharecast News) - Octagonal's shares plummeted on Wednesday after it warned that its subsidiary Global Investment Strategy UK (GIS) is expected to report a decline in earnings and sales for its most recently ended financial year due to "challenging geopolitical uncertainties".GIS expects to report EBITDA of £1.8m for the year ended 31 March, a decline of 41% compared to the year before, while sales decreased by 18% to £5.4m, with the AIM traded financial services company arguing that the results reflect a reduction of £0.8m in non-core corporate finance income.Geopolitical uncertainties also caused difficulties, with chief executive John Gunn stating that political deadlock and shut down in Washington during the company's 3rd quarter coupled with the domestic concerns over Brexit had undoubtedly impacted equity and bond markets both domestically and overseas."We don't believe that either of these events represent a trend and are therefore not unduly concerned. The business continues to deliver meaningful returns and is focused on expanding the franchise. We are not immune from the volatility and lower volumes, but we must not allow the short-term turmoil to impact our strategy of developing a global diversified financial services group," added Gunn.GIS also incurred costs associated with the regulatory governance of the SynerGis business brand in key areas of oversight, IT infrastructure, and mandatory control, having taken its effective shareholding in SynerGis Capital to approximately 77% after investing a further £0.2m .Octagonal's shares were down 16.67% at 1.50p at 1325 BST.