(Alliance News) - Quartix Technologies PLC on Monday said the outlook for its Evolve fleet management product is more tricky than first expected, amid a slower UK electric vehicle transition.
Quartix shares were 9.6% lower at 140.12 pence each in London on Monday afternoon.
The vehicle tracking systems firm has been probing Konetik, which had been acquired in September, as well as prospects for the Evolve fleet management product. Konetik, which has operating in Berlin and Budapest and owns and develops the software used in Evolve, was acquired for up for EUR3.9 million.
Quartix said demand for Evolve has suffered amid delays to electric vehicle transition. It noted the UK government postponed the ban on the sale of petrol and diesel vehicles to 2035.
"The ability to generate substantial increases in the volume of licence sales is now expected to require much higher investment in the software infrastructure due to limitations in the scalability of the current product," Quartix warned.
It added: "The customer acquisition cost and implementation support are now expected to be much higher than previously anticipated."
Quartix now believes Evolve is not "an effective tool for the acquisition of new vehicle tracking customers" and it will book a GBP2.5 million impairment.
"Following this review the board is committed to reducing the impact of this acquisition on the operating performance of the company as soon as possible. However, a further consequence of the conclusion of the review is, regrettably, that a substantial, one time, non-cash impairment in the goodwill arising from the Konetik acquisition will need to be made in the company's 2023 financial statements," Quartix cautioned.
"Quartix generates strong recurring revenues and operational cashflows from its subscription base and the company will refocus its efforts on its primary strategic objective of delivering profitable growth in this core business."
By Eric Cunha, Alliance News news editor
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Quartix Tech (QTX)