LightwaveRF (LON: LWRF) have announced expectations for an annual loss in their most recent trading update, and that the loss made will be ‘materially below market expectations’.
The Birmingham-based home automation technology company has warned shareholders that losses are expected after revenue for its latest quarter was “so significantly” under what the board had anticipated.
This comes as a shock for shareholders, as the board at LightwaveRF seemed confident at the start of 2019 that profits were set to be delivered.
LightwaveRF, which made a loss of £2.54 million for the year to 30 September 2018, said it had expected its full-year revenue to double following the first three quarters of the year.
However, following “one-off” issues in the fourth quarter to 30 September, the AIM l(INDEXFTSE: AXX) listed business said its “substantial progress” had been “nonetheless been held back”.
Chief executive Jason Elliott added: “”Following the excellent progress made during the first three quarters of the financial year, the last quarter presented us with a number of challenges. Whilst revenue is significantly higher than last year, the expected full year results are still frustrating following the substantial progress made”
Elliot concluded “As well as continuing progress with direct to consumer and direct to trade sales, supported by our LightwavePRO training scheme, we anticipate early further progress with some major customer initiatives and revenue soon returning to run rates seen prior to Q4”.
In 2018, the automation firm made a full year revenue of £2.8 million in 2018.
After potential of a deal with Google (NASDAQ: GOOG) back in July hit investor news, shareholders have seemed skeptical about the ability of LightwaveRF to deliver profits.
In a statement the business said: “In order to meet the working capital, marketing and development needs arising from the revenue growth in the first three quarters referred to above, the company had hoped that it would have raised funds by the issue of further equity under the then existing authorities, granted at the company’s last annual general meeting, and signed the inventory finance facility with ESCS earlier than was the case.
Additionally, the firm added “These events occurred later than expected, on 16 August and 4 September, respectively, but with the former requiring a waiver of Rule 9 of the Takeover Code and publication of a circular to shareholders”
“These delays impacted cash availability and limited the company’s ability to invest in key areas, including digital marketing, and consequently revenue in Q4.”
Lighwave RF concluded “”The Lightwave offering and our strong customer support continues to be well received in our markets.”
As a result, shares of LightwaveRF crashed 30.86%.
Shares are currently trading at 4.24p per share. 4/11/19 13:20BST.
