LONDON (Alliance News) - IS Solutions PLC Monday expressed confidence in meeting market expectations for its full year, underpinned by recent business wins and its pipeline of prospects, despite swinging to a loss in the half year to end-June.
The hardware and software company posted a pretax loss of GBP323,000, swinging from a profit of GBP345,000 a year before, as revenue declined to GBP3.4 million from GBP5.0 million.
IS Solutions has opted not to pay an interim dividend in order to preserve cash, although it said it expects to resume payment of the dividend and its progressive dividend policy based on its full year performance.
In February the company put a contract in its Analytics business on hold due to its client's internal budget constraints, and one of its major projects in its Portal business entered into testing, which hampered revenue.
IS Solutions said that, as this was a short-term hurdle, it opted to keep all of its costs in place "at the expense, in the very short term, to the bottom line."
The company said it had also been hit by the strength of sterling, which caused a 9.4% reduction in its day rate to its US clients. This has improved since the period end, however, it said.
In its Portals business, the company said it had secured further contract wins, which will provide revenue for its second half, including a two-year contract for the hosting and management of an Adobe based on-line meeting system for the UK government.
Its Analytics business was hampered by a lack of new project work, IS Solutions said, although it has secured a number of proof of concepts in the third quarter which it said should lead to longer-term contracts for the fourth quarter and into next year. It is currently in the final stage of negotiations for a project which the company expects to enhance its second-half performance and help it meet market expectations.
"The board remains confident of achieving the market expectations for the full year based on recent business wins and the depth and quality of the prospects pipeline, following a weaker first quarter," said Chairman Barrie Clark in a statement.
Shares in IS Solutions were trading down 17% at 45.00 pence Monday morning.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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