Norkom stock plummets 30pc on revised forecast
SHARES in the financial software group Norkom plummeted yesterday, after the company revised its half-year forecasts.
The stock fell 30pc in Dublin, closing at 88c, after Norkom said revenue in the six months to the end of September would be between €22m and €22.5m, compared to €24.6m for the same period a year ago.
At one stage yesterday morning, shares were down almost 40pc, before recovering slightly in the afternoon. The stock has almost halved in value since the middle of April.
The Dublin-based company blamed the decline on "elongated sales cycles together with the delay in new regulatory guidelines passing into law in Asia".
Earnings before interest, tax, depreciation and amortization are expected to be in the range of €1.2m to €1.5m, compared to €4.5m last year.
"Having rigorously reviewed all of our markets and operations we are confident that our near-term revenue performance is a factor of timing and not reflective of the underlying market opportunity," said chief executive Paul Kerley.
The company said the long-term prospects of the company remained positive.
"Delayed regulatory enforcement in Asia is expected to come through in 2011/12 as indicated by the various authorities," they said in a statement to the stock exchange.
Despite the revised forecast, analysts remained strong on the stock.
"Whilst obviously this guidance revision is a setback for the stock, we note these regional delays should reverse when the local authorities pass the relevant legislation," said Dan Cavanagh of Goodbody stockbrokers.