Shares in SmartSpace Software (LSE: SMRT) are down by 18%, at the time of writing. The stock crashed after the company warned that sales this year are likely to be lower than previously expected.
The group’s share price has now fallen by more than 50% from its June highs and is 15% lower than it was a year ago.
SmartSpace makes software used to manage office buildings, such as hot desking and meeting room booking systems. The company says that continued global uncertainty about when staff will return to the office is causing clients to delay purchase decisions.
The group’s partnership with Swedish firm Evoko appears to be a particular concern. Sales of the Evoko Naso room manager system — for which SmartSpace provides software — were expected to improve in the autumn. The company says Naso sales in September and early indications for October haven’t shown the expected growth.
As a result, SmartSpace now expects revenue to rise from £4.6m to just £5.2m during the current financial year. CEO Frank Beechinor expects to report an adjusted loss for the year of “not more than £2.7m”.
To put this in context, broker forecasts before today suggested SmartSpace would report revenue of £6.9m for the year, with a loss of £0.7m.
Still making progress?
Today’s update also included some details of SmartSpace’s recent trading. The company says that annual recurring revenue rose by 53% to £3.78m during the first half of this year, compared to the same period in 2020. And gross profit margins also improved, rising from 51% to 71%.
SmartSpace also said it expects stronger growth rates to resume when “business environments return to normal”.