Wynyard halves 2016 guidance after more than doubling first-half loss

Wednesday 24th August 2016

Wynyard Group, the intelligence software developer, more than doubled its first-half loss and halved its full-year guidance.

The net loss widened to $36.3 million in the six months ended June 30, from $17.6 million a year earlier, the Auckland-based company said in a statement. Operating expenses rose 49 percent to $38 million as revenue increased 4.5 percent to $12.8 million.

The company slashed its full-year earnings guidance to between $27 and $30 million from a previous range of $54 to $65 million. This excludes a $27 million government contract the company announced in January.

“It’s been a tough first half for everybody; employees, your board and shareholders alike," chair Guy Haddleton said. “Most growth enterprise software companies deliver the bulk of their new revenue in their second half and Wynyard is no different in this regard. Given the significance of the very large contracts we believe a prudent approach to revenue forecasting is necessary. None of the large deals in our pipeline have been lost - we’re making good progress but wish to be cautious in setting market expectations.”

Haddleton said the company was in a better shape to deliver on opportunities in the second half as it had implemented $17 million of annualised cash savings in the second quarter.

The company is forecasting monthly cash burn will fall to $2.4 million in the second half, from $4.8 million in the first half, "as a result of expected revenue increase and implemented cost savings."

Wynyard has this year revamped its board and restructured into two units while embarking on a cost-control strategy after a disappointing 2015 performance. Its shares recently traded at 37 cents and have tumbled 79 percent this year.

The share price has fallen since a disappointing annual result in February, where revenue of $26.3 million was well below the forecast $40-to-$45 million, followed by a heavily discounted rights issue in March to raise working capital.

BusinessDesk.co.nz

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