Sabien continues to dive as sales conversions prove tricky

Sabien Technology dived on Thursday after a "challenging" period for the energy saving technology provider resulted in a drop in sales orders but losses were reduced through cost-cutting.

A loss before tax of £0.21m for the six-month period ended 31 December was down 11.2% compared to the same period the year before, even as revenue dropped 26.0% to £0.34m.

The reduction in losses was achieved through a 48.4% drop in cost of sales to £0.05m and administrative expenses being cut by 16.6% to £0.50m.

Directors said they remain "focused on returning the company towards profitability and has continued to manage the group's working capital tightly during the period" with cost-cutting policies continuing to be effective.

"The six-month period ended December 2018 was another challenging period for the group given the continuing unpredictability on the timing of conversion of the sales pipeline into sales orders."

Sales orders received have dwindled, dropping to £0.13m from £0.23m with a sales pipeline currently standing at £10.6m, including potential clients that have been given a quote but have not indicated an order.

Sabien acknowledged that it needs to achieve "a sustained improvement in the conversion rate of the order book to sales in the year ahead to reach the board's target of breakeven for the company".

The AIM traded company had cash and cash equivalents of £0.28m at the end of the period, up from £0.13m at the same point the year before.

Sabien Technology's shares were down 35% at to 0.091p at 0846 GMT, down from 0.63p at the start of last year.