(Alliance News) - D4T4 Solutions PLC on Wednesday said it expects its annual earnings to be below expectations on customers switching to recurring software-as-a-service contracts.
The data software firm expects revenue for its financial year to the end of March to be GBP21.7 million, with adjusted pretax profit expected to be around GBP5.0 million. For comparison, adjusted pretax profit for financial 2019 was GBP6.0 million on revenue of GBP25.2 million.
D4T4 said customers have clients have moved from one-off perpetual license contracts to recurring software-as-a-service contracts where revenue is recognised over a longer period instead of within one financial reporting period. It said recurring revenue amount increased, representing 46% of the total group revenue, up from 30% the prior year.
The Sunbury-on-Thames, Surrey-based said that in the fourth quarter of the year, it won a new contract with a global telecommunications company in Asia Pacific and two within the banking and financial services sector in the Americas.
Looking ahead, D4T4 said it does not expect restrictions enforced to contain the spread of Covid-19 to hurt its services to customers or its distribution channels/partners.
The company said it is reviewing its full year dividend payout for financial 2020 as well as its market guidance for financial 2021 due to uncertainty caused by the Covid-19 outbreak. It added that it has implemented cash conservation methods and has reached an agreement with its bank to provide additional liquidity if needed.
"Despite the backdrop, and at the time of writing, we are upbeat about our prospects as we continue to see good levels of sales activity amongst both existing and potential new corporate clients," said Chief Executive Peter Kear.
D4T4 shares closed 9.7% higher at 169.00 pence each on Wednesday afternoon in London.
By Ife Taiwo; ifetaiwo@alliancenews.com
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