LONDON (Alliance News) - Pinnacle Technology Group PLC said it remains "increasingly confident" about its future prospects, as it posted a narrowed pretax loss for its first half.
The IT managed services provider reported a pretax loss of GBP563,958 for the half year to end-March, compared to a pretax loss of GBP1.2 million in the same period a year before, as a decline in revenue to GBP4.0 million from GBP4.3 million was offset by a reduction in operating expenses, lower amortisation and impairment, and in the previous year the company had posted exceptional costs of GBP294,849 related to restructuring.
Pinnacle attributed the fall in operating costs to cost-savings initiatives it undertook during the half year.
A fall in revenue in its IT Security Solutions business caused by continued price competition and in its Telecommunications Services segment due to a diminishing market offset growth in its IT Services and Cloud Services and Data Connectivity segments.
The company is currently embroiled in court proceedings in relation to a third party engaging in a business solicitation activity that contravened prior contractual agreements. Pinnacle said whilst the matter was "an unwelcome distraction" in the short term, it is confident of success and it is working on "maximising the return of legal costs arising from this situation".
Following the half year end, the company raised GBP860,000 through a share placing in order to help fund its growth strategy and for general working capital.
"We said it would take time to turn the business around, as seen by these results, but we remain confident that the leaner, more focussed organisation will return to profitable revenue growth. This confidence is further supported by the recent funding round that considerably strengthens the company's balance sheet, with the substantial investment from two of the company's existing institutional shareholders," said Chief Executive Officer Nicholas Scallan in a statement.
Shares in Pinnacle are trading up 0.7% at 7.05 pence Monday morning.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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