Pinnacle Technology's shares plunge as full year earnings loss widens

(ShareCast News) - Shares in Pinnacle Technology Group plunged on Friday after the company widened its full year earnings loss as revenues fell.In the year to 30 September 2015, earnings before interest, tax, depreciation and amortisation came to a loss of £572,000, compared to the prior year's £512,000 loss.Revenue fell to £7.9m from £8.4m the previous year, reflecting a poor performance at its IT Security division and its traditional telecommunications services."These revenue reductions arise primarily in our fixed line telecommunications services, where, like many in the industry Pinnacle Technology suffers from a declining market in fixed line voice and telephony calls; the less attractive aspects of our IT Security services; and the previously reported acts of wilful misconduct," the company explained in a statement.Nevertheless, the loss after tax narrowed to £1.3m from £1.8m, as the group reduced operational costs.Chairman James Dodd said the company has made a considerable effort to address legacy issues, resulting in the business being in a "cleaner state"."The impact of the previously reported acts of irregular behaviour has been worked through," he said."Poor performing areas of the business have been reduced or exited, whilst we have invested in stronger areas of growth."Separately, the company announced it would buy information technology services companies Ancar-B Technologies Ltd and Weston Communications Ltd for a combined £5m in cash and shares.The acquisition will be funded by raising £4.55m through the issue of 108.4 million shares at 4.2p each.Shares were down 27.67% to 8.50p at 1605 GMT.