Perform Group issues profit warning
Group share price halves as it reveals "significant" drop in EBIDTA and revenue expectations following "disappointing" performance
Perform Group may reduce headcount after being forced to issue a full-year profit warning and downgrade next year’s forecasts following slower than expected growth during the current trading quarter.
A Q4 trading update revealed revenues for 2013 will be 6% below the board’s previous expectations with EBITDA to fall “significantly” short of earlier forecasts. Despite the warning, its annual year-on-year growth rate is still expected to be in excess of 35%.
Revenue expectation for 2014 has also been lowered by 6% which again is expected to directly impact EBITDA with the revisions causing its share price to tumble 247p to 180p at the time of writing.
The company has attributed the shortfall primarily to deterioration in its advertising and sponsorship division, with growth having slowed across a number of markets, particularly in Germany and the US.
“We are disappointed with the performance of the business in Q4 against our expectations and as a consequence this has an impact on our outlook for 2014,” Oliver Slipper, joint chief executive Officer, said in a statement.
The underlying performance of its content distribution also suffered a lower than expected performance with joint chief executive officer Simon Denyer attributing this to a delay in the start of a contract with a “major media customer” during a call with analysts.
During the call, Denyer also revealed the company was to take a “more prudent approach” during 2014 which could result in a number of job losses.
“There are saving to be made in rights, staff and production costs,” Denyer said. “Integration has not gone as quick as planned and several websites are still running on their own platform so there’s a duplication of resources and staff.”
The results have come as somewhat of a surprise after Perform last month announced Q3 revenue growth of 31% and indicated it was planning on making further acquisitions.
Earlier this year the Group acquired sports data company Opta for £40m while in 2012 it added RunningBall in a landmark £120m deal and also made regional acquisitions in the form of Mackolik, Sportal and Voetbalzone.
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