POS and ticketing software company, Clarity Commerce Solutions has firmly hit the reverse button, with a full year revenue and profit warning, and subsequent restructuring, after making more positive noises only late last year (see Clarity investing for future). Clarity said that key second half orders, particularly in Europe, are still being negotiated, and most of these will now close in the new financial year starting April 1, 2011. As a result, FY10/11 revenue will now be “significantly below market forecasts” (analysts had been expecting revenue of £24.4m, vs. £19.1m in FY10) and because of the high weighting to license sales, this is also going to hit Clarity's “profit or loss position”. That sounds ominous! Investors also thought so, and knocked 25% of Clarity's share price.
To start cutting costs, Clarity will sell some of its UK hotel customer accounts and staff to rival Paragon POS for £470k. And management is “actively” looking at further cost cutting.
This is a very disappointing turn of events for Clarity, which had been looking in better shape since its acquisition of UK-based Cyntergy last June (see here). It now looks like further disposals will be on the cards in the near future.