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LONDON (Alliance News) - AIM-listed Arcontech PLC, which provides financial market data processing and trading services, Thursday said it swung to a first-half pretax profit but warned that its full-year results could be hit as a big customer has asked to end its contract almost two years early.
The news hit Arcontech shares early on Thursday, with the stock down 32% at 0.105 pence per share.
Arcontech made a GBP116,932 pretax profit in the six months ended December 31, 2014, compared with a GBP66,735 pretax loss in the corresponding period of the prior year. Revenue increased to GBP1.0 million from GBP976,578 and administrative costs fell to GBP925,699 from GBP1.0 million, more than offsetting a fall in finance income to GBP1.0 million from GBP2.2 million.
However, the company warned that it is uncertain about the level of profitability it can achieve in the current year ending June 30, as a "significant customer" has requested that its contracted be terminated 18 months early.
Arcontech did not explain why the customer, which it didn't name, has asked for the early termination of its contract, disclosing that the reasons are "outside of our control".
"We are currently working to resolve the situation. Although we expect to achieve new sales wins before the year end, due to revenue on our contracts being taken to profit on a monthly basis, it is unlikely that we will be able to fully compensate for the loss of revenue should the contract be terminated," Arcontech said.
Arcontech said it expects to report a "positive result" for the six months to the end of June.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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