ATTRAQT lowers guidance following financial review

ATTRAQT Group updated the market on its “detailed review” of its forecasts on Friday, which was initiated at the board’s request following the appointment of Eric Dodd on 1 September.

The AIM-traded firm said the review concluded that, due to inaccuracies in forecasting the timing of certain contracts and client ‘go-live’ dates, it was necessary to revise its full year outlook.

It said it now expected revenues for the full year to be about 10% below previous expectations, but still showing year-on-year high single digit organic growth and to be EBITDA positive in the second half of the year, as well as being broadly breakeven for the year as a whole.

The lower revenue run rate at the end of 2017 would carry forward into 2018.

“The delay in pipeline conversion is due to a number of significant new contracts closing but later than planned, and some other contract decisions being delayed,” ATTRAQT’s board said in its statement.

“Inaccuracies in estimating the period between engagement and the "go-live" dates have also been identified by the review.”

The company said its sales pipeline remained “strong”, with ATTRAQT continuing to win new client logos and sell upgrades to its existing clients.

Management was reportedly confident that the forecasting around the timing of contract wins had now been resolved.

It also said it has a “strong” order book of £2m in annualised contract value, with management was working on a plan to resolve delayed ‘go-live’ dates.

“The company is working on the expectation that a significant proportion of the attrition risk relating to clients re-platforming - as discussed at the time of the interim results - will crystallise early in 2018,” the board explained.

“The mitigating actions outlined in the interim statement, including the hiring of additional account management resource, will continue to be implemented.”