Maintel’s (MAI) shares plunged over a fifth after it warned that sales and cash profits would be lower in the second half than previously expected.
First, Maintel has seen a significant movement away from short-term projects, where revenues and cash profits are more rapidly recognised, towards longer-term recurring revenues. Maintel expects this shift to persist over the rest of the year to December and into 2019.
Second, some of the projects that Maintel had expected to complete in the second half have been delayed, also dampening the P&L.
Management now expects adjusted cash profits for 2018 of between £12m and £12.5, against £10.9m in 2017. Beforehand, house broker finnCap had forecast £15.4m; it has now reduced this to £12.2m, giving adjusted EPS of 63.2p.
It wasn’t all bad. Maintel said its transition into a cloud and managed services provider had continued, with two big wins on its hosted UC (unified communications) platform this month alone. And bosses still plan to lift the 2018 dividend, while net debt is also expected to fall year-on-year. Moreover, they anticipate revenue and cash-profit growth for 2019.
