Stilo slumps as profits dwindle

(Sharecast News) - Stilo International's shares plunged on Thursday after the software developer reported that revenues and profits had suffered and warned that the year ahead would be "challenging".Profit before tax in the calendar year fell 55% to £0.1m as revenue dropped 21% to £1.5m.The AIM-listed company' chairman David Ashman said that the reduction in revenue was principally due to an expected reduction in OmniMark-related revenues from one major customer. OmniMark allows developers to build efficient content conversion pipelines that support the rapid insertion of multiple content filter elements without loss of processing speed."However, it was encouraging that our Migrate revenues held up well, as new customer wins compensated for the expiry of a major contract. We were also successful in making some initial breakthroughs with sales of AuthorBridge to new customers. Given our size, we continue to incur significant financial overheads associated with being a public listed company, but notwithstanding this we were able to generate a post-tax profit for the period of £177,000," said Ashman.Migrate is a Darwin Information Typing Architecture that Stilo has developed to offer an alternative to traditional outsourced conversion services using its unique approach to XML content conversion. AuthorBridge is a low-cost web XML editing tool that can be used by SMEs and ID professionals and requires no knowledge of DITA or XML. At 31 December Stilo's cash and cash equivalents stood at £1.3m, down from £1.6m at the same point the year before.In the immediate future, the company said it plans to step up sales, marketing and development efforts but warned that 2019 will be "a challenging year for the company", with potential demand difficult to predict at the current time."The company continues to invest in the development of leading technologies for the structured content market and in so doing build long-term value for shareholders. As we look forward to growing future sales, supported by healthy cash reserves and a strong balance sheet, I am pleased to announce the payment of an increased final dividend of 0.06 pence per share, providing a total dividend for the year of 0.12 pence."Stilo International's shares were down 21.05% at 2.25p at 1100 GMT.