Maintel points finger at project delays for revenue miss

AIM-listed company anticipates lower revenue for its latest fiscal year

Maintel has blamed a number of delays with contracts and projects for its lower-than-anticipated revenue for FY19.

In a trading update for the year 31 December 2019, the comms VAR said it expects revenue to be approximately £123m and adjusted EBITDA at £10.8m.

The AIM-listed company blamed the result on delayed announcements of public sector frameworks which "significantly reduced" the number of available bids during the period, and that the contracts it did win through frameworks came too late in Q4 to affect revenue for the fiscal year.

The December general election was also fingered for causing political and economic uncertainty that resulted in projects being delayed, as well as the loss of four contracts by two of the group's partners, which it said caused managed service revenue to be reduced "faster than expected".

However, the company is confident that there will not be similar risks in 2020 with contract renewals.

Maintel expects low single-digit organic revenue growth for FY20, supported by the "improved" order intake in Q4 and more public sector activity.

CEO Ioan McRae stepped into the position last October from his role as UK boss at Avaya after the departure of long-time boss Eddie Buxton. He said the results are "disappointing" but that it is making headway in its strategy of becoming a cloud-first company.

"While our anticipated overall results for 2019 are disappointing, we are very encouraged by the progress against our strategic aim of becoming a cloud-first company," he stated.

"In FY19 the number of contracted seats on our ICON platform grew by 25 per cent year on year, including winning our first channel partner contract for our cloud services.

"An increase in public sector business coupled with a strong performance in order intake in Q4 2019 provides us with a good degree of confidence for 2020, when we expect to return to both revenue and EBITDA growth.

"Less than three months into the job, despite these disappointing results, I am even more optimistic about the prospects of the group. We have identified a number of strategic initiatives to deliver growth and margin improvements which we will look to implement over the course of this financial year."