LONDON (Alliance News) - Ten Lifestyle Group PLC shares fell Monday as the company said revenue in its current year and next year will miss expectations due to deferral of certain contract revenue.
The stock was trading at 117.40 pence each on Monday, down 24%.
Lifestyle and travel platform Ten Lifestyle said since the end of last August it has increased its number of "sizeable" corporate contracts to 27 from 15, with two more expected by the end of this coming August.
However, revenue for its financial years ending August 2018 and 2019 is expected to be below estimates at around GBP6.0 million and GBP10.0 million, respectively.
Ten Lifestyle said this is because the length of time between winning a contract and the start of revenue earning has taken longer than expected, meaning some revenue has now been deferred.
Also, six contracts expected in its current year will now occur in its next year, while it also said a "significant" contract it expected to win will probably not occur, materially hitting both revenue and earnings expectations for its next financial year.
For its current year ending August, it expects a narrowed loss before interest, taxes, and amortisation due to better efficiency.
However, Ten Lifestyle said some investment not made in its current year will now occur in its next, meaning profit in that year will not be as high as anticipated.
Despite not winning the major contract, the company said its pipeline is stronger than at the time of its initial public offering in November.
Chief Executive Alex Cheatle said: "We are disappointed to announce this reduction in expected net revenues. With the exception of the unsuccessful tender for a large potential contract in the Americas, where we were not prepared to compete on price, most of the reduction is due to deferral of business rather than loss of business or tenders."
"We believe that Ten's customer and competitive proposition has strengthened over the recent months and we are as convinced as ever about the significant market opportunity and Ten's growth potential within that market as well as our ability to generate value for our shareholders."
Ten Life (TENG)