Shares in Aurrigo International (LSE:AURR) plunged 35% on Monday after the transport technology group warned full-year revenues will fall well short of market expectations.
The AIM-listed company said first-half sales were broadly in line with its own forecasts, at £3.5 million.
However, it signalled a tougher outlook for the second half of the year, driven by ongoing challenges in its automotive division and delays in its autonomous vehicle projects.
Aurrigo’s automotive division, which supplies technology to car manufacturers, suffered from the knock-on effects of US tariffs on UK vehicle production.
While sales in the first quarter met expectations, the second quarter saw “volatility and deferrals” from customers, making it unlikely that lost sales in the first half will be fully made up by year-end.
This division still generates positive cash flow, which supports investment in the company’s autonomous vehicle division.
The autonomous division, which develops self-driving transport solutions for airports and other sites, recorded revenue growth of 41% to £1.14 million in the first half, boosted by progress on the Changi Airport project in Singapore.
But Aurrigo said delays to testing programmes, product refinements, and postponed contract tenders meant many new projects would start later than expected, now mostly pushed into next year.
The company noted that it had begun a project at Zurich Airport after signing a six-month deal with Swissport International, the world’s largest airport ground services provider.
Meanwhile, it is in talks with several other international airports and partners but warned that contract wins would take longer to materialise.
Aurrigo expects second-half revenues to be roughly the same as in the first half, a disappointment compared to analysts’ forecasts.
This will also hit earnings before interest, tax, depreciation and amortisation (EBITDA), a common measure of operational profit.
To offset some of the impact, the company has introduced cost-saving measures and secured £1 million in government grant funding.
The grants come from Innovate UK and the Connected and Automated Mobility Pathfinder programme, supporting projects to develop sustainable autonomous transport solutions.
This includes further testing of autonomous cargo and shuttle vehicles at East Midlands Airport and collaborations with partners such as International Airlines Group and the Highlands and Islands Transport Partnership.
Cash on hand stood at £1.8 million as of 30 June, and the board expressed confidence in its ability to secure key contracts despite the setbacks. Aurrigo will announce its full results later this month.
The shares fell 25.78p to 47.22p.