The management team at Alternative Networks has played the Brexit card to explain why the London-listed IT and comms integrator has missed profit expectations for FY’16, which ends this month.
The Mobile division had stabilised and with cost-cutting actions to offset the impact of new tariffs on roaming rates, margins were beefed up in the second half of the year, the business claimed.
The same cannot be said of Advanced Solutions (IT services), where the Intercept IT and Control Circle buys are housed. Alternative claimed there was a spending hiatus in late June and July after Brits voted for Brexit, and this delayed the completion of some projects.
“We are disappointed to have seen business uncertainty over the summer in the wake of the EU referendum impact our Advanced Solutions business,” said Alternative CEO Mark Quartermaine.
He added that new business “pick up” in August and September had improved the medium-term outlook.
As such, earning before income tax, depreciation and amortisation (EBITDA) will be “somewhat below management’s previous expectations”. EBITDA is estimated to come in at £18.3m versus forecasts of £24m a year ago.
The 23 June vote can only be blamed on one profit warning from Alternative, not the other two that have taken place in the past year (one in February and one in 2015 that was due to pre-election jitters).
Analysts at Megabuyte said the integrator needs to “rebuild investor trust” following the profit warning, “though optimists will take heart that the company has now had the obligatory three warnings”.
Shares slumped 11 per cent this morning to 270 pence, which is half the early 2014 peak of 570 pence. Whoops. ®