Shares in Quixant (QXT) plunged by more than a fifth after the company, which designs and manufactures PC-based gaming platforms for slot machines, warned on profits for the year ending December 2018. Overall, it expects group revenues to be around $115m (£88M), “slightly lower” than market forecasts at the time of $120m. Adjusted pre-tax profits are also expected to come in slightly below market expectations of $18.98m. Broker Peel Hunt’s estimate was for $18.6m; analysts there have now reduced this to $18m.
True, management experts to report strong revenues from the core business, with double-digit annual growth for gaming platforms. But – as previously signalled – the company has been working to improve margins within the smaller slot-machine monitors division. And removing lower-margin business in this division means revenues have fallen overall.
Net cash sat at approximately $9.9m as at the period-end. House broker finnCap notes that this suggests $10m of cash generated ahead of capital expenditure in the second half, from around $12m adjusted cash profits.
