LONDON (Alliance News) - Pinnacle Technology Group PLC Thursday posted a widened pretax loss in the half year to end-March, although it said it is confident it will return to profitability thanks to the turnaround programme being implemented under its new chief exceutive.
The IT services company posted a pretax loss of GBP1.2 million, widened slightly from GBP1.1 million in the previous year, as revenue declined to GBP4.3 million, from GBP5.4 million, due mainly to a 64% decline in revenue in its IT security business. The revenue decline was partly offset by lower cost of sales and lower operating expenses.
Pinnacle is slimming down the IT security division to improve its overall profitability. The unit operates in area subject to fierce price competition.
The company said the "disappointing" first-half results represented a "work-in-progress" in the midst of a difficult and protracted turnaround. It said that current management had inherited a loss-making business "built up from a wide variety of disparate acquisitions which had never been integrated into an efficient corporate structure".
Newly appointed Chief Executive Nicholas Scallan has been reviewing the business, with the aim of accelerating a return to profitable growth, sharpening its focus, and continuing to reduce costs.
"Whilst significant progress in turning the business around will take time to achieve, in looking ahead we believe that this review will result in a leaner, more focused organisation that we are confident will return to profitable revenue growth," said Scallan in a statement.
Shares in Pinnacle were trading up 13% at 8.46 pence Thursday morning, one of the top gainers in the AIM All-Share index.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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