Ingenta swings to loss amid pursuit of higher margin contracts

Ingenta swung to an annual loss on Monday after restructuring led to a drop in revenue and higher administrative costs

The company, which provides software and services to the publishing industry, recorded a loss before tax of £1.2m for 2018, down from a profit of £0.8m the year before, as revenue fell by 18% to £12.0m.

The drop came as the AIM traded company's new strategy placed increased emphasis on higher quality contracts in order to pursue better margins and administrative costs climbed by 42% to £4.9m.

To take note of, the sales and marketing team was restructured and "tangible" improvements in lead generation and pipeline development were already coming through.

Scott Winner, chief executive of Ingenta, said: "Our strategic move away from product silos towards a more client centric structure is starting to produce real results, and we look forward to 2019 with great enthusiasm. Our business is now leaner and focused on delivering first class services for all our customers with significantly improved positioning for the next stage of our growth."

Cash and cash equivalents stood at £1.3m at the end of the year, down from £2.1m the year before, while the dividend was kept at 1.5p per share.

A statement from Ingenta said: "The group can look forward to 2019 with renewed optimism as the positive benefits from its long-term business reorganisation plan continue to roll out. The board believe the business is now significantly de-risked, producing a higher quality, cash generative earnings stream whereby the fixed costs of the business are met by its highly visible recurring revenues. Combined with this, the group's efforts to strategically build its sales pipeline are now paying off and we hope to capitalise on this momentum through our refreshed sales targets for 2019."

The company added that Brexit is not anticipated to impact software sales and the majority of its revenue is within the UK and US markets, though the situation will be continuously monitored.

Ingenta's shares were down 1.41% at 70.00p at 0935 BST.