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Universe Group profits sink after contract delay
AIM-quoted fintech business Universe Group saw a sharp fall in profits in its most recent trading year as contract delays offset broadly flat revenues.
Universe's total revenues dropped just 0.46% to £19.62m and its gross profit margin remained steady at 47.6%, but the group still posted a steep decline of 65.5% in pre-tax profits as a result of implementation delays in a single large customer, resulting in revenues from software licences and hardware losing 20.6% year-on-year to £3.70m.
Adjusted EBITDA came in at £2.77m, before £400,000 of exception costs, down 26.5% and earnings per share tumbled to 0.26p from the previous year's 0.76p figure.
Andrew Blazye, non-executive chairman of the group, said, "Universe continued to move forward during 2017 with the production and roll out of our next generation EPOS solution and latest payment terminal, Gempay 3. As reported earlier in the year, however, the group's financial performance in 2017 was affected by delays in a small number of customer deployments. Our cost base was also intentionally increased as we invested in further technical development activity and sales personnel to assist with our new product launches."
Moving forward, Blayze added, "Opportunities continue to materialise with existing customers for our next generation EPOS, payment, and loyalty solutions reflecting the strong and loyal relationships we have, and the strength of our products. The take-up of next-generation products and feedback from customers bodes well for the future".
Cash on Universe's balance sheet stood at £2.89m as of 31 December, down 15.25%, and after deducting debt of £1.03m, net cash at the year-end dropped 11.85% to £1.86 million.
As of 1040 BST, shares had lost 4.55% to 5.25p.