Etion warns of a full-year loss


Etion warns of a full-year loss

Published Date: 2019-06-25 | Source: Stephen Gunnion | Author: Stephen Gunnion

Etion warns of a full-year loss

Apart from a umber of once-off costs, the digital technology group says customers are spending less on projects.

Etion says it will probably report a full-year loss, attributable in part to the weak economy and lower spending on projects by its customers.

In a second trading update, the digital technology group said earnings and headline earnings per share were likely to fall into a loss of between 0.5c and 0.75c, a decline of more than 100% from last year's 7.26c. That's even worse than last week's update, which guided towards earnings of between 0.1c and 0.3c per share.

Etion said its financial statements had also been affected by adjustments for new accounting standards as well as various once-off costs related to the execution of its strategy and costs related to the acquisition and integration of cybersecurity specialist LAWtrust into the group.

The group has been restructuring its business to take advantage of the digital revolution and the Internet of Things. Delays in the delivery of a R22 million key rail project and a large cybersecurity project worth R21 million affected revenue in the first half of its financial year. Although these were offset by good margins generated by last year's acquisition of LAWtrust, earnings were affected by finance costs related to the LAWtrust deal and absorption of its cost base. The group reported a first-half loss of 0.5c per share.

It expects to release its results by the end of the week. Its shares rose 3.9% to 27c in thin trade yesterday.

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