News blog
Dillistone Group
- BY: Andrew Hore |
- POSTED: 12/06/2017 |
Recruitment software provider Dillistone Group says trading remains difficult even though new clients are being won and this means that the dividend will be cut.
New business is coming from small and new recruitment firms so there are a limited number of licences sold to each of them. That means that Dillistone is still behind its original expectations for this point in the year.
There is also the likely loss of a contract worth £600,000 a year, which will have a full effect in 2018.
On the bright side, recurring revenues have grown but interim revenues are likely to be flat and the cost base has risen. There should be a small interim operating profit. An improvement is anticipated in the second half but not enough to prevent a significant undershoot of expectations.
Dillistone has secured a potential customer for the new product it is developing. There will be £2.4m spent on development up until the end of 2018. There was cash of £1.3m on 2 June 2017 but Dillistone wants to raise more cash to complete the development of the new product.
If the new product does take off it should generate enough cash in two or three years time to improve the dividend.
WH Ireland has slashed its 2017 pre-tax profit forecast from £1.5m to £200,000 and it does not expect any improvement in 2018. The dividend forecast has been reduced from 4.25p a share to 0.86p a share and then it is expected to be reduced further to 0.56p a share in 2018.
So far in 2017, the share price has fallen by one-third to 65p.
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