Life sciences group Deepverge PLC (AIM:DVRG) has downgraded its 2022 full-year revenue guidance following a comprehensive review by the newly appointed management team and chief financial officer Andrew Waters.
Deepverge noted that a number of contracts were incorrectly recognised in excess of works completed and therefore revenues for 2022 under the relevant accounting standard IFRS15 are expected to be approximately 45-50% of the £17.2mln initially provided by former managers.
The company expects most of the revenue shortfall for 2022 to be recognized in 2023, with some unlikely to be realised.
Despite this, Deepverge's order book for clients Modern Water and Glanaco currently exceeds £10mln, and the company expects all of it to be delivered and recognised as turnover in 2023 and 2024.
The company is also pursuing additional contracts and expects to announce them soon.
Deepverge’s current cash balance of approximately £1mln is expected to remain sufficient for the company to continue as a going concern, though funding options including trade finance are being explored.
Chairman Ross Andrews commented: "Whilst it is extremely disappointing that 2022 revenues are likely to be so far below the figures provided by the previous executive management team, I'm confident that the new management has robust plans in place to deliver the order book during 2023 and 2024."