MISSION Group shares tanked on Monday after the marketing company said it now expects full-year profits to be “materially below market expectations,” as challenging trading conditions persist.
The marketing communications group forecasts headline pretax profits of no more than £3.1 million for 2023. This includes £1.2 million in costs from a business to be divested.
MISSION Group shares were down 67% at the time of writing.
The downgraded guidance comes as key clients in consumer, property and automotive sectors reduce or defer ad spending. Recent trading has been “more challenging than anticipated.”
While full year revenue is still expected to grow 8-9%, MISSION has commenced an operational review to cut costs. This includes headcount reductions to benefit 2023 and 2024.
The group also cancelled its 0.87p interim dividend to preserve cash. Net debt jumped to £25.5 million in October from £14.9 million in June.
MISSION remains in talks with NatWest bank regarding a covenant waiver, as higher debt pushes leverage ratios above current limits.
The board said it is “extremely disappointed” by the change in trading. But it believes MISSION is positioned to benefit as markets improve given continued investment in capabilities.