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React Group expects another 'challenging year'
AIM-quoted deep cleaning and decontamination business React saw annual losses widen as consolidation within the industry and budget constraints at much of its public sector customer base pressured margins.
Pre-tax losses widened 51.72% to £440,000, despite React successfully boosting revenues by 8.8% to £2.6m. Losses per share widened to 0.14p each from the 0.05p posted twelve months before.
React referred to the year as being one of "significant change and challenge", highlighting a squeeze on profit margins coming as a result of a 24-hour service guarantee held by many of its larger customers.
The firm did win two major contracts, one of which for £200,000 with a large London hospital, but despite its strategy of higher-value contracts starting to pay dividends by virtue of providing the firm with an increased recurring revenue base, React still expected the current trading year to be a "challenging" one.
Chairman Gill Leates said, "We will continue to focus our efforts on the larger contracts to improve the quality of the customer base and to raise our profile in our target markets."
"There are still a number of challenges facing the business but we are optimistic the changes we are making will deliver value for shareholders in the future," she concluded.
React's cash position fell to £630,000 from the £930,000 it held on December 31 a year earlier
As of 0920 GMT, shares had dropped 14.29% to 0.45p.