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Sabien To Raise Funds In Early 2018 Amid Sales Conversion Frustration (ALLISS)

LONDON (Alliance News) - Sabien Technology Group PLC on Thursday said loss for the 2017 ...

Alliance News 7 December, 2017 | 10:42AM
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LONDON (Alliance News) - Sabien Technology Group PLC on Thursday said loss for the 2017 financial year was broadly flat and sales fell sharply due to unpredictability regarding sales conversion.

The company, which develops energy reduction technologies, reported sales for the year to the end of June of GBP510,000, versus GBP880,000 in the year ago period, which led to a gross profit of GBP336,000, down from GBP562,000.

"Sales for the year were 42% lower than in the previous year primarily due to free pilots not having a material effect on reducing timings of our sales cycle," the company said.

While sales from alliance partners dropped to GBP43,000 from GBP173,000, overseas sales climbed higher to GBP198,000 from GBP107,000.

Both the pretax and operating loss for the financial year were broadly flat year-on-year at GBP1.7 million.

The company's sales pipeline at the end of the year sat much lower at GBP8.7 million compared to the GBP12.2 million pipeline a year earlier. As of Monday, that pipeline stood at GBP9.1 million.

The company said it is still targeting to breakeven on a monthly basis by December 2018, although warned it will continue to need to raise additional equity funding to provide further working capital.

Calendar year-end cash balances are expected to rise from GBP26,000 at June-end, through the final payment of a contract announced in June, and the company plans to raise additional equity funding in the early part of 2018.

Chairman Bruce Gordon has confirmed he intends to support the company and participate in any such funding and subscribe for GBP100,000. Gordon has agreed to advance his subscription amount with no interest cost to support the firm until the fundraising is complete.

"The board continues to focus its efforts on returning the company towards profitability and has been frustrated by the unpredictability of conversion of the sales pipeline into sales orders, with disappointing sales for the year under review," said the company.

"However, the board is focusing on developing recurring revenues from rental contracts and from Forensic Boiler Audits, a new consultancy service being offered by the company. The board believes that these new rental contracts offer the potential to provide stable, consistent revenues and thereby over time provide a greater visibility to the Board on future financial performance," it added.

"Despite the challenges, the board remains confident about the group's product and services, the potential market and therefore the prospects for the year ahead," Sabien Technology said.

Sabien was up 18% at 0.74 pence in morning trade.

By Joshua Warner; joshuawarner@alliancenews.com

Copyright 2017 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article
Security Name Price Change (%) Morningstar
Rating
Sabien Technology Group PLC 0.63 GBX 0.00 -
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