600 Group PLC (AIM:SIXH) shares fell 7% in morning trade on Wednesday as the industrial laser systems manufacturer warned of an anticipated operating loss for full-year 2023 (FY23) due to the delivery of unprofitable ordinary course customer contracts.
The AIM-listed company said these contracts resulted in lower gross margins than initially anticipated, primarily due to unexpected input cost inflation during the contract period.
In a trading update for the financial year ending on 31 March 2023, 600 Group said its unaudited figures indicate that the company expects revenue to reach approximately US$30mln, with gross profits of at least US$11.5mln, however, there is an anticipated operating loss of around US$2.4 mln for FY23.
Despite the challenging financial performance, 600 Group reported an order book of US$7.8mln as of 31 March 2023. However, its unaudited net debt stood at US$5.9mln, reflecting increased working capital requirements at the company's Tykma business, which produced and delivered higher-value units during the period.
Around 8.55am, 600 Group shares were down 7.3% at 8.00p.