Trakm8 Holdings PLC (LON:TRAK) shares crashed in early trading Friday after the firm swung to a loss for the first half and forecast a 25% drop in full-year revenues.
The dashcam and fleet management software group reported an interim pre-tax loss of £2.9mln, a drop of 2,538% from a £120,000 profit a year ago while group revenues were cut by 38% to £8.8mln.
READ: Trakm8 shares fall as it makes weak start to the year
Gross margins for the period also contracted 3% to 46% on the year-ago period, while net debt ballooned 148% to £5.7mln.
The firm blamed its exit from the Contract Electronics Manufacturing business last year as one of the key factors impacting its revenues, although the group’s executive chairman John Watkins said the exit had accounted for £2.27mln of the revenue decline, with the rest coming from attrition of its insurance customers and “unexpected lower than usual revenues” in its Fleet and Optimisation (FO) segment.
In its outlook, Trakm8 said an improved financial performance in the second half, which it had forecast in a trading update in September, would “not materialise” as anticipated.
The company cited the loss of a multi-million-pound contract in Iran due to US sanctions, a move to rental models in automotives, and delays in customer decisions in the FO business as the main factors.
As a result, the group said it now expected revenues for the current financial year would be 20%-25% lower than the year before, and 10% lower on a like-for-like basis.
Shares were down 62% at 24p.