Escher Group Holdings license deals won't be completed by year-end

Escher Group Holdings license revenue for the year is expected to be "materially lower than expectations" for the year, which has sent the share price plummeting.

The AIM-listed company revealed on Friday that a number of additional license sales that it had expected in the second half of the year will not be able to be closed.

As a result, group revenues are now expected to be approximately $22m (£14.5m) for the year on a reported basis.

"It is disappointing to have to report a shortfall in new license revenue which has restricted the strong growth in adjusted EBITDA year on year,” said chief executive Liam Church

"We will now end the year with a strong balance sheet, with forecast net debt down from $5.3m to $3.1m at year end, an increasing proportion of recurring revenue and numerous growth opportunities, particularly in our rapidly developing Interactive and Digital businesses, where significant investment is taking place."

The statement from the company also highlighted that it has continued to make good progress in developing its recurring license and maintenance revenues, and has secured significant contracts in Germany and the US.

“Currently, our visible and recurring revenues for 2016 will amount to more than 50% of total 2016 revenue,” it said.

“The majority of this revenue is contractually committed for several years, is high margin and is not dependent on new license sales.”

Shares in Escher Group Holdings plunged 65p (29.55%) to 155p at 0855 GMT.