Immedia Group PLC (LON:IME) was out of favour with the market on Tuesday after it blamed the bad timing of new contracts for a swing to a loss in 2016.
The group, which provides streamed music programmes to retailers, posted a small profit before tax in 2015 but for the year to 31 December 2016 it fell to a loss before tax of £184,000.
That was on revenue of £2.61mln, which was almost 10% ahead of the £2.37mln it posted a year earlier.
Immedia blamed the fall into the red on the “timing differences” between acquiring new clients and the expiry of other contracts.
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On top of that, there were some one-off costs related to the acquisition of the AIM-quoted firm’s new trading division, AVC Immedia, and the subsequent financial support to ease it in.
The group’s cash balance also took a hit as result of the AVC acquisition – which it paid for in cash – with Immedia having just shy of £126,000 in cash and cash equivalents as of 31 December 2016 (31 Dec 2015: £353,000).
Frustrated but upbeat
“The year has brought some frustrations as contracts have expired in the normal course of events; substantial new contracts have been won, but with some delays to planning and expected delivery of revenues,” said chief executive Bruno Brookes.
“However, these new business wins now demonstrate that our revenue and profit growth difficulties are behind us.”
Immedia said it is “looking forward” to what 2017 brings and that trading has started strongly so far.
It also expects revenues to grow once more despite a contract with telecoms giant BT Group PLC (LON:BT.A) coming to an end last month.
Three “significant” customer wins were made towards the end of 2016 while AVC will also make its first full-year contribution.
New non-exec
In a separate stock market announcement, Immedia told investors it had brought in Simon Leathers as a non-executive director with immediate effect.
Leathers is a chartered accountant who has been working in corporate finance for more than 16 years.
He will join Immedia’s remuneration committee as well as the audit committee where he will become chairman.
Shares slumped almost 13% to 29.25p in morning trading on Tuesday.