ASX-listed IT services provider, Empired (ASX:EPD), has faced a dip in its shares. According to the ASX, the company has gone from a closing price of $0.77 on January 15 to $0.56 on January 21.
At the time of publication, the company’s shares dropped further to $0.42.
The company was in a trading halt yesterday and was questioned by the ASX if it was aware of any information concerning it that has not been announced to the market, which if known by some in the market, could explain the recent trading in its securities.
In a reply back to the ASX, Empired denied that any such information was leaked, in addition to issuing a statement about its expected revenue numbers for FY16.
According to the company, it expects its revenue in the first half of 2016 to be about $79 million, and that a “number of items have impacted first half trading results”.
It claimed its reported EBITDA will be in the range of one and two per cent of its revenue. It also expects revenue in the second half of the year to be in the range of $80 and $90 million, with EBITDA margins of eight and 10 per cent of its revenue.
“These items have been more severe than first anticipated, however can be considered one off or transitional in nature as Empired ramps up a number of major strategic contracts and matures the integration and operating model of the broader organisation,” it said.
It elaborated to mention that as a result of the company’s recent integration activities, which saw a restructure in its sales organisation, it has faced both delays and a lag to project based work on the east coast.
The impact is said to total to about $4.1 million.
In addition, it said a ramp up and delays in commencement dates of new strategic contracts have resulted in additional contract costs of about $1.1 million in the first half of the year.
Empired managing director, Russell Baskerville, said the company is confident in the investments and strategic initiatives undertaken and looks forward to delivering improved financial performance and value creation for its shareholders.
“Whilst we have delivered strong top line growth, we are disappointed by the number of items impacting profitability in the first half and are confident that these items are either one-off or transitionary in nature.
“The initiatives undertaken during the first half of FY16 have been critical in positioning the organisation for long-term sustainability and improved margin performance, which we consider prudent n uncertain economic times,” he added.
Empired will be releasing its FY16 half year accounts on February 29.