Cloudbuy’s shares dive after 25% revenue fall
Cloud-based eCommerce player Cloudbuy’s shares plunged more than 25% after the firm said it expects full year revenue to fall by 25% as old legacy contracts fell away.
They later recovered somewhat to just 4.3% lower at 3.35p.
The firm said that, while contracts won in 2016 continue be positive, non-renewal of older legacy contracts and a continual decline in company formation revenue resulted in revenue falling 25% year on year.
Cost savings continued to be implemented in 2018 resulting in a reduction in an operating loss before share based payments of approximately 25% compared to 2017.
Cloudbuy said it continues to work with NHS Shared Business Services to onboard individual clinical commissioning groups onto PHBChoices. “With confirmation in the recently published 10 Year Plan that the NHS remains committed to personalisation as a key initiative, the pace of onboarding is increasing”, it said in a trading update.
The move to profit and cash flow break-even remains the company's key priority. It said year end cash is expected to be £769,000 with an R&D tax credit of £124,000 received post year end in January 2019, which would ordinarily have been received in 2018.
"The reduction in revenue in 2018 is a disappointment and results from lower revenue from contracts won in 2016 and a number of legacy contracts ending and not being replaced by new opportunities”, said Ronald Duncan, Executive Chairman and CIO.
“The business strategy remains to focus on revenue from existing customers in the UK, Canada, Singapore and Australia with significant growth expected from PHBChoices in 2019. The first 5 weeks of 2019 have shown good progress from PHBChoices although from a lower base than we had expected."