Despite record revenues and profits for 2006, London banking and securities software vendor Mondas is warning that its full year earnings will fall below expectations due to delays with a major contract at the end of the period.
AIM-listed Mondas has forecast annual operating profit before tax, acquisition costs and amortisation charges of £400,000 on revenues of £6.3 million, compared with the £770,000 loss incurred in the previous year.
But despite this Mondas says full year trading will come in below market expecations due entirely to a delay in the signing of a large licence extension agreement from an existing customer for its Radica Caps corporate actions processing system. The vendor says it expects to sign the agreement shortly.
Shares in AIM-listed Mondas slipped five per cent to 14 pence in morning trading on the news.
On a more positive note, Mondas says it expects to report that all its business units were profitable. Its Blue Curve division, which provides research distribution software to financial services firms, had a particularly successful year and more than doubled its revenues compared to 2005. At the end of the year Mondas secured a second US client - a West Coast based investment bank - for the Blue Curve product.
The group's contracted support revenues for 2007 increased by 47% to £2.8 million.
"The company has substantially improved its working capital position and operating cashflow is positive, putting it in an excellent position to take advantage of the momentum built during the year," Mondas says in a statement.
The vendor will report its preliminary results for the year ended 31 December 2006 in March.