Quartix warns on profits as revenues fall short of expectations

System software company Quartix Technologies warned on Friday that revenue and underlying earnings would fall short of current market expectations, leading it to lower guidance for both 2023 and 2024.

Quartix said that although it had made "good progress" in annualised recurring revenues, the rate of growth was sufficient to achieve current market expectations for revenue in 2023 or 2024, with the group now reducing its own expectations by approximately £900,000 and £2.6m, respectively.

The AIM-listed group said the combination of reduced expectations for revenue, together with additional operational costs related to its Konetik acquisition, a reduction in gross margins, and "some inflationary pressures" on marketing costs left it anticipating adjusted underlying earnings for 2023 and 2024 to differ from current market expectations by around £1.1m and £2.4m, respectively.

Quartix said it will consider the payment of a reduced ordinary dividend at year-end, but cautioned that there will be no supplementary dividend payable for the year ending December 2023. Underlying cash generation within Quartix's core business remains strong, it said.

As of 1055 BST, Quartix shares had tumbled 22.42% to 155.16p.

Reporting by Iain Gilbert at Sharecast.com