Troubled Adept4 nears end of strategic review

Managed services provider sees interim losses widen to £1.1m

Loss-making MSP Adept4's shares tanked again this morning on another mixed set of results.

The AIM-listed Microsoft, Fortinet and Mitel partner saw net losses widen to £1.1m in its fiscal first half ending 31 March 2019 as it revealed it is nearing the end of a review of its strategic options.

Revenues also fell from £5.4m to £4.2m.

Adept4's share price, which stood as high as £16.63 in 2015, has been on the slide for several years.

Today it has tanked a further 27 per cent to a pallid £0.37.

Following an "extremely challenging" fiscal 2018, the firm has lopped £75,000 off its monthly cost base following a cost reduction programme completed in March.

Although the as-a-service specialist claimed business won from existing customers is now on the up, its interim results were hit by the cancellation of a contract with a "major customer" in April. Adept4 said it is currently seeking legal redress from the customer, whose business generated £0.7m of revenue last year.

As well as being a Microsoft CSP, Adept4 works with Mitel, Gamma and Fortinet, and claims to be the sole UK partner of endpoint prevention and response vendor Nyotron.

Some £3m of Adept4's £4.2m interim revenue haul was recurring in nature, with £0.8m coming from product sales and £0.4m from professional services

Chairman Simon Duckworth said the business has returned to modest levels of monthly trading EBITDA profitability and reduced cash burn, adding that it will update shareholders on its plans "in due course".

"In seeking to recover value for shareholders the Board has been considering the strategic options open to the Company and working with its professional advisers, its debt provider and its major shareholders to find the best way forward for all stakeholders," he stated.

"This review is now nearing its conclusion and the board will announce the outcome of this as soon as practicable."