(Alliance News) - LoopUp Group PLC on Wednesday said it expects to post annual earnings significantly below market consensus due to "subdued revenue" from long-term customers and increased staff training.
Earnings before interest, depreciation, taxation, and amortisation is now forecast as 20% below market consensus, with revenue down 7% versus consensus.
Shares in LoopUp plunged 48% to 132.00 pence in response to the news.
The remote meetings company, which offers conference call services, said its weak revenue was not due to "any material change in customer loss rate" but instead stems from "general macro-economic factors". Year-on-year revenue erosion is around 7% within LoopUp's established customer base compared to 1% net growth in 2018.
LoopUp's sales team consists of 'pods', which are each run by around six people and rely entirely on new revenue growth. More of the company's senior quota-carrying pod staff have been diverted into management and training than expected, as LoopUp copes with its increase in pod staff to 112 from 63 at the end of 2018, which has hurt earnings.
Co-chief executives Steve Flavell and Michasel Highes said: "We are experiencing some broad macro-economic headwinds in our business and have needed to take on board some learnings and growing pains resulting from what is essentially a very positive expansion of team size in our new business pods.
"However, we believe the LoopUp product remains strong and differentiated in a very large addressable market, we continue to see excellent demand for that product, and we remain confident in our ability to deliver strong future growth."
Revenue for 2019 will be weighted around 48% in the first half and 52% in the second.
LoopUp has also opted to accelerate roll-out of video functionality in its flaship product due to "strong customer feedback", which is predicted to create "value-added pay-as-you go revenue " from LoopUp's existing customers.
