Bulletproof downgrades profit forecast

Bulletproof downgrades profit forecast

Expects to see $2 million loss in underlying earnings before interest and tax for the financial year ending 2017

Anthony Woodward - Co-founder and CEO, Bulletproof

Anthony Woodward - Co-founder and CEO, Bulletproof

Cloud services provider, Bulletproof (ASX:BPF), has downgraded its full year profit forecast by roughly $500,000, telling shareholders to expect a $2 million in underlying earnings before interest and tax (EBIT).

At the same time, however, Bulletproof told customers that its revenue would be $500,000 more than initially forecast, with the company expecting to report revenues of $49 million.

“The prospects in the pipeline and the on-the-ground activity within the business [are] quite good, and it’s just going to take the financials a while to start reflecting that, as we go forward,” Bulletproof CEO, Anthony Woodward, told ARN. “The end of the financial year does tend to bring a little bit of an uptick usually.”

Meanwhile, underlying earnings before interest, tax, depreciation and amortisation (EBITDA) will be roughly $600,000 lower than initially forecast, at $2.4 million.

The company said that, while revenues during the fourth quarter of the 2017 financial year were ahead of internal forecasting, there has since been some variance in expense items, including a foreign exchange rate issue, and some revenue items that should not have been factored into modelling as recurring.

In addition, the company said, some cost of sale savings have taken longer to materialise, further reducing profitability from forecast for the quarter.

“While the updated forecast still reflects a turnaround in underlying profitability from H1 FY17, work is continuing throughout the business to accelerate improvements and bring business performance up to expectations,”  Woodward, told shareholders.

The company said it is currently undergoing a business-wide review to identify key areas to drive shareholder value in FY18.

The earnings forecast update comes roughly five months after the company reported a loss of $5.4 million for the first half of the financial year, as it continued through a period of consolidation.

The Sydney-based company said, in a statement on the ASX at the time, that it had been in a period of consolidating assets and skill sets as it looks to move beyond hosting and services and into consulting and software development.

It reported revenues of $24.5 million for the period, amounting to a 13 per cent increase on the same period last year.

Bulletproof attributed the loss to various factors, including $809,000 in restructuring costs.

At the time of publication, Bulletproof's shares were trading at $0.09.

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