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LONDON (Alliance News) - Shares in experiential marketing and media company SpaceandPeople PLC dropped in opening trade on Thursday after the company issued another profit warning for 2014 as a host of its businesses failed to meet performance expectations.
The company's shares were down 16% to 43.07 pence in early trade, hit by a trading update in which it said it would once more revise its full-year expectations, having done so already in April.
The group said the first half of 2014 had proven challenging for its business and said that, while some of its operations have traded in line with the revised expectations, others have proved disappointing in comparison to the revised forecasts.
In the warning in April, the group said its promotions and retail businesses in the UK and Germany had both performed below expectations and said these units have continued to weigh on its performance since that update. The German retail arm, in particular, has seen a slowdown in expansion into new centres and also reduced occupancy of units. The company said on Thursday that German retail profits will be significantly lower than anticipated for the year as a result of the issues.
In UK promotions, net revenue dropped 14% in the half-year. It was down nearly half in German promotions and by around a third in UK retail.
In addition, the group said a delay for a major project on which its S&P+ unit has been working will mean a significant element of its revenue and profit for the year is likely to be deferred to 2015.
The company is now forecasting pretax profit of GBP500,000 to GBP700,000 for the year, compared to the GBP2.3 million it made for the full year in 2013. It said profit before tax and exceptional items is forecast to be GBP800,000, with GBP200,000 upside potential.
Along with the trading update, the group posted its half-year results, which showed a pretax loss of GBP253,000 in the half-year to June 30, swinging from the GBP613,000 profit made a year earlier.
That came in spite of a rise in revenue in the half-year to GBP7.2 million, against GBP6.7 million last year. That revenue rise was offset by an increase in the cost of sales in the period, up to GBP3.5 million from GBP2.1 million in 2013.
For the coming year, SpaceandPeople said it intends to focus on improving sales and reducing costs, along with improving its venue acquisition performance.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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