LONDON (Alliance News) - Tangent Communications PLC shares dropped heavily in early trading on Thursday after the company said profits in the first-half will be below market expectations due to problems in its agency and Tangent Snowball operations, hitting the prospects for its full-year performance.
Shares in Tangent were down 19.2% to 7.471 pence in early trade, making it the second biggest faller on the AIM All-Share market.
In a trading update for the six months to August 28, the online printing and digital marketing firm said group operating profit for the year to February 28, 2015 is now expected to be comparable to the previous full year.
Online sales are expected to increase 10% to GBP8.7 million in the year, with profits set to be in line with full-year 2014 levels, it said. It expects to see sales from its Printed.com business grow 30% year-on-year to GBP3.6 million, with sales in the second half expected to rise on the back of a bigger customer base and the launch of photography services this month.
Tangent said its Goodprint online printing business will provide another route to the online marketplace for Printed.com, but said sales would be lower year-on-year, though it is well-positioned to progress in the future.
But despite the positive performance for its online business, its largest contributor to sales and revenue, the group said the difficulties in its agency business will offset that performance.
Agency sales are expected to fall 20% to GBP4.5 million, with operating profits to fall GBP0.5 million year-on-year. Revenues in the Tangent Snowball business were impacted by budget cuts by two big clients, along with the divestment of its Australian operations.
Tangent says its focus is now on generating more revenues from its online business.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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