DeepVerge shares tumble as FY 2022 revenue expectations drop

DeepVerge shares tumbled 10.8% to 13.6p in early afternoon trading on Friday, after the group announced a lowered revenue expectation of approximately £18 million in FY 2022.

The company said the lower revenue would be reflected in a smaller projected EBITDA and a slight fall in gross margins, alongside a small increase in overheads.

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DeepVerge reported a HY1 revenue growth of 95% to £6.4 million compared to £3.3 million in HY1 2021.

The firm noted a 128% surge in orders in HY2 to over £8.8 million against £3.9 million the last year.

The group added its Modern Water business saw £6.5 million in orders secured to the close of July, representing a 116% climb in one month, along with multiple £1 million installation bids still outstanding for site installations.

DeepVerge mentioned a Labskin and Skin Trust Club sales growth of £1 million, with 27,000 club members and over 300 products added to the marketplace, with an additional 200 products scheduled to be added.

The firm also commented on its prospect pipeline, which has seen success in converting its opportunities into firm orders for delivery in FY 2022, with £6.5 million in deals across China, South Asia, India and Africa.

However, the company warned there was uncertainty as to whether its conversion rate over the coming months would meet previously expected levels.

“H1 2022 has been another exceptional fast growth period for DeepVerge. Modern Water is in the right place at the right time, to deal with the global water crisis,” said DeepVerge CEO Gerard Brandon.

“Also, Skin Trust Club has hit a rich vein of consumer desire to take control by personalising the skin care industry which can be seen by the rush of skin care products being added to the Skin Trust Club marketplace, that only began in Q1 this year.”

“Although full year 2022 revenues might be lower than previously guided, sales and orders continue to rapidly expand across all divisions in the current macroeconomic and geopolitical environment. We have taken a prudent stance to guide the market on year-end revenue and will provide further updates as necessary.”

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