Shares of Petards Group PLC (LON:PEG) have crashed over 20% on Tuesday as the firm told the market it expects to report an annual loss.
The firm said that project delays had contributed to the 2019, as the firm saw their shares in red.
Shares in Petards Group trade at 9p (-20.08%). 4/2/20 12:10BST.
The security and surveillance technology company said that it is expecting a pretax loss for 2019 – following a change to a big customer order. Petards said that a customer re-scheduled eyeTrain system deliveries into 2020, which hindered performance late into 2019.
Notably, profitability levels on two rail projects was a lot lower than what was expected which also contributed to the disappointing update on Tuesday.
The firm said that it expects to report revenue for 2019 of £15.8 million, down 21% from £20.0 million a year earlier, and down 8.7% compared to market expectations of £17.3 million. In 2018, Petards generated a pretax profit of £1.1 million.
Raschid Abdullah, Chairman of Petards Group plc said:
“While it is disappointing to report on the lower than expected 2019 revenues due to customer re-scheduling and on the impact this and the higher project costs have had on profitability, the Group remains in good shape.
“Following the Group’s significant investment in recent years, and with little further investment in product development anticipated to be required in 2020, the Group expects to be net cash generative in the coming year and the Board remains confident of the Group’s future prospects.”
Petards slump in 2019
In September, the firm posted a profit warning and regression in their financial results following a slow first half to the year.
The Company’s order book slid down from £19 million to £15 million year-on-year during the first half, which led a dip in revenues to £8.9 million, down 8% on-year.
Owing to their sales performance, the
Group’s adjusted EBITDA narrowed from £1.085 million, to £0.766 million. Additionally, the Company’s pre-tax profit folded from £0.514 million to £0.206 million and their cash position swung from £1.0 million net cash to £0.7 million net debt.
Petards will have to address the issue sooner or later, as shareholders will be concerned that share prices have effectively sunk.