RE: INVESTOR ⚠️ CAUTION NOTE RCFX v ALRT (LSE)5 Sep 2025 08:16
From the last trading update/profits warning -
However, whilst management had previously assessed that its diversified tier-1 and prime customer base would be resilient ahead of publication of the SDR, it is now clear that a number of existing and prospective customers have delayed or reduced their short-term spending and development activity which has negatively impacted demand for the Company's services in recent months. The Board now expects that this situation will not unwind immediately and that the impact may be sustained for the next few months while existing and potential customers assess their needs and budgets in light of the findings of the SDR.
Furthermore, during the IPO process, responsibility for the day-to-day operational control of the business, including Sales, was handed over to the Company's COO & Co-Founder, Daniel Clark. It has however recently become clear that the newly expanded Sales team has not been able to convert a strong pipeline of leads into revenue-generating contracts at the rate expected by the Board. This includes the new contracts that, as announced in the Company's interim results on 17 April 2025, had been booked as anticipated revenue for FY25, but is now expected to be generated in FY26.
The Company has therefore proactively undertaken several mitigating actions, including hiring an experienced Sales director together with a wider, significant organisational restructuring to provide better alignment between the Sales team and its engineering and project delivery capabilities. Daniel Clark will also leave the role of COO and take a career break.
As a result, the Board now expects the Company's FY25 performance will be significantly below market expectations, with FY25 revenue expected to be not less than £4.0 million. At 31 May 2025, the Company held unaudited cash balances plus net trade and tax receivables of £2.6 million which the Company, based on current expectations, considers is sufficient to meet its anticipated working capital requirements.
While the Board is very disappointed to not meet expectations in the Company's first full reporting period following its IPO, it expects the uncertainty created by the SDR to be temporary and remains confident in the Company's prospects and longer-term outlook. Recent strategic hires, operational improvements, and renewed customer momentum provide the foundation for future growth that is supported by strong underlying market drivers.
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