Quixant PLC (LON:QXT) shares tumbled in lunchtime trading on Monday after a record set of final results was overshadowed by a more cautious outlook on the year ahead.
The AIM-100 firm, which makes computers and monitors for slot and other gaming machines, said it was taking a “modestly more prudent view” of its anticipated revenues for 2019, although it stressed that the impact to its profitability would be “minimised”.
Demand to be weighted towards second-half
Jon Jayal, chief executive, added that some of the company’s key customers had indicated that their demand for its products would be weighted towards the second half of the year, and as such, expected its performance to mirror this trend.
Investors didn’t take kindly to the more prudent approach, with shares dropping 9% to 302.5p.
The adverse reaction was also in spite of what Jayal said was “another year of record revenue and profits” with 3% growth in adjusted pre-tax profits to US$18.2mln and revenue growth of 5% to US$115.2mln.
The full-year dividend was also hiked by 19% to 3.1p per share.
Takings were boosted in the year by growth in the company’s core gaming platforms division, which saw revenues jump to US$62.5mln from US$54.4mln in 2017.
Broker cuts target price and 2019 forecasts on back of cautious outlook
In a note to clients, analysts at Peel Hunt cut their target price for Quixant to 400p from 500p on the back of Jayal’s comments on the coming year while also reducing their pre-tax profit forecasts by 6% to US$19.8mln.
However, analysts retained their ‘buy’ rating on the stock, saying that the company was “delivering on its promise to become a major B2B supplier” given that orders from its larger customers were 76% of its total last year compared to 61% the year before.