LONDON (Alliance News) - Paragon Entertainment Ltd saw its shares fall Monday, after the company said its pretax loss narrowed in the first-half of the year, but contract delays resulted in a drop in first-half revenue and are expected to hit revenue for the remainder of the year and result in a loss for 2014 as a whole.
In a statement Monday, the company also announced that Chief Executive Mark Pyrah will be stepping down, to take up the role of group sales and marketing director, in order to drive the group's organic growth.
Pyrah, an original founder of Paragon Entertainment, will continue in the chief executive role while the search for a new CEO takes place. The company also said it has appointed Vice Chairman Mark Taylor as executive chairman with immediate effect.
The company, which designs and builds attractions such as theme parks and museums, reported a pretax loss of GBP720,000 for the six months to June 30, compared with a GBP1.3 million loss in the first-half of 2013, after its results in 2013 were hit by higher impairment charges and amortisation.
However, the company's gross profit declined slightly, as a delay in contracts meant revenue in the first-half fell to just under GBP4.0 million, down from GBP4.6 million a year earlier.
Paragon Entertainment said further contract delays will "significantly impact expectations" for the rest of 2014. It said revenue in the second-half will be lower than expected, and will lead to a earnings before interest, taxes, depreciation and amortisation break-even position for the second-half.
"This will translate into an overall EBITDA loss for the year of approximately GBP0.1 million," the company said in a statement.
The company said its 'Design and Build' division, the largest of the group's divisions, remains profitable, and has seen a large increase in projects and opportunities. It said the pipeline of potential new projects continues to increase, with confirmed project orders for the second-half of the year of around GBP4 million, with a further GBP8 million anticipated in 2015.
"Paragon's 'Design and Build' division remains the most profitable segment of the business and continues to have a record contracted order book. However, further delays on certain Paragon Creative contracts will cause a delay in recognising the revenue from these contracts, which will now move into 2015," said Chief Executive Pyrah in a statement.
Paragon Entertainment shares were trading 4.4% lower Monday morning at 2.75 pence per share.
By Rowena Harris-Doughty; rowenaharrisdoughty@alliancenews.com; @rharrisdoughty
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