Image may be NSFW.
Clik here to view.
Q4 was a disappointing one for marketing software vendor Alterian, which today warned that it expects revenue for the year to 31 March to be 10% below market expectations (which are £42-£44m). Profits will be materially impacted with up to 95% of the revenue shortfall coming straight off the profit. CEO David Eldridge is stepping down as a result. He will continue to play some role whilst a successor is recruited and non-exec director Iain Johnston will take on the role of Deputy Chairman to provide additional support.
Alterian met expectations in Q3, but we warned at the time that Q4 would be all important (see the HotViews archive). Revenue is heavily weighted towards the final quarter and the timing of contracts is increasingly difficult to predict. According to Alterian, the shortfall predominantly relates to the deferral of a licensing contract renewal and extension which should have been signed before the year end. It wasn’t; apparently because of substantial management changes at its partner. Alterian still thinks the contract is likely to be renewed but it’s not a certainty and there’s no guidance on timing.
It’s a shame to see Elderidge go. He has been with the company since its foundation 14 years ago and the CEO since the IPO in 2000. He’s clearly made a significant contribution to Alterian, which we still believe has the type of product that companies need to compete in an Internet age. All in all, a disappointing period for Alterian and its share price has suffered as a result – it’s currently trading at 155p, down from a close of 190p on Friday.
