Delay in contract talks hits TTP Comm's '05/'06 revenue, puts back break even date
TTP Communications plc (TTC.L) said today that extended negotiations on a major project would cut previously projected revenue in the second half of the current financial year to end March and delay reaching operating break even.
The directors said there has been considerable progress in the talks and they remained confident the deal would be completed in the first quarter of the new financial year.
As a consequence, they said, sales revenues for the second half to end March 2006 are expected to be about £17m to £18m and the operating loss between £14m and £15m inclusive of bad debt provisions of £3m, but before restructuring charges of £1m.
Group cash balances are expected to be around £4m to £5m reflecting a cash outflow in the six months of £10m to £11m compared with the expected cash neutral position had the major contract completed as anticipated before March 31st.
TTPCom develops intellectual property used in the design and manufacture of wireless communication terminals.
Underlying revenues up
The board said underlying sales revenues increased in the second half but progress in 3G "continues to be slower than we would like" and is likely to remain that way until handsets using its technology are in shops as planned mid way through this year.
"Looking to the future", the directors said, "we believe that our AJAR technology provides the company with a unique platform from which to achieve a market leading position in applications software for 2G and 3G feature and low cost phones. We expect volume deployment by our lead customers in the second half of next financial year.
"In Protocol Stacks and Silicon (our Modem technologies), we expect to see in the coming financial year the results of our re-alignment of the business to focus on a more broadly based approach to distribution.
"We remain confident that our position in both 2G and 3G and our technology portfolio will create significant value for shareholders going forward."
Predictably, some shareholders were spooked by the news and sold the share down 6p or 27%, to 16p. The share price has been in steady decline since a peak around 100p in early 2004.
Mr Gerald Avison (pictured) is the chairman of the board.
21 March 2006
