Adept4's 'challenging' year sees losses widen as revenues stutter

Adept4 shares dipped on Friday after the company reported a widened loss on the back of reduced revenue, increased cost of sales and administrative expenses.

For the year ended 30 September the IT services provider reported a loss before tax of £3.98m, up from £0.83m at the same point the year before, as revenue crept 1.1% lower to £10.19m and cost of sales increased by 8.3% to £4.48m.

Meanwhile, administrative expenses remained flat at £5.60m but further damage was done to profits by an impairment charge of £2.6m.

Simon Duckworth, chairman of Adept4, said: "Despite it being a challenging year for the business, we have made progress against each of our key areas of strategic development including the strengthening of our senior operational management team and development of our technology partnerships."

A mixed year saw the AIM-traded company bring a warranty claim against vendors of the MIT business, subsequently winning the legal case and agreeing a settlement in the sum of £1.6m payable post-period end, while the investments made into the new sales team have so far failed to deliver results.

At the end of the period the company had cash and cash equivalents of £1.43m, down from £2.91m at the same point the year before.

"We have improved our levels of service delivery leading to high levels of customer satisfaction, though the investment made in the new sales team has not yet delivered the results we had hoped for. Maintaining our strong relationships with existing customers, together with protecting the group's cash balances and shareholder value are our key objectives while we explore the strategic options for the group," said Duckworth.

Adept4's shares were down 4.76% at 1.00p at 0922 GMT.