Orion shares drop to record low on warning
Delay settling contracts in key US market.
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Orion Health Group [NZX: OHE] shares fell to a record low after the healthcare management software developer said delays in settling contracts and paying bills in North America will weigh on second-half revenue.
"While receipts from customers are traditionally slower in the third quarter of each financial year they were lower than expected in the third quarter of FY2015 due to slower contract closures and billings in North America," the Auckland-based company said in a statement. "Management expect this trend to continue in the fourth quarter of FY2015."
Sales were also dented as Orion moved customers to subscription contracts from perpetual licences, it said.
Shares in the company dropped 6.7 percent to $5.60, their lowest level since the stock listed on the New Zealand bourse in November last year. The shares were initially sold at $5.70 apiece, raising $120 million in new capital to fund development. The company is also listed on the ASX.
Orion didn't provide an earnings forecast in its prospectus last year because of the "lumpy" nature of the group's revenues, saying it didn't want to mislead investors. Orion had an annualised growth rate of 26 percent over the past 10 years, according to offer documents. It posted a loss of $14.8 million in the six months ended Sept. 30, 2014, on sales of $80.5 million. The company isn't paying dividends.
(BusinessDesk)
Tina Morrison
Fri, 30 Jan 2015
Fri, 30 Jan 2015
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Orion shares drop to record low on warning
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