Norkom Technologies in profit warning

SPECIALIST IT services company Norkom Technologies has issued a profit warning for the first half of its current financial year.

The Dublin-headquartered company – which has a significant international sales network for its range of anti-fraud and money laundering software solutions for financial services firms – said yesterday, via a trading update, that EBITDA (earnings before interest, tax, depreciation and amortisation) for the six months to the end of September should amount to between €1.2 million and €1.5m. This would be down from the €4.5m generated in the same period last year.

The company also expects first-half revenue to amount to somewhere between €22m and €22.5m; which would be down from €24.6m at the corresponding period last year.

This decrease in revenue – driven, mainly, by a delay in the passing of new regulatory guidelines in Asia (one of Norkom’s main markets) – and an increase in the company’s sales and product development expenditure will pull down first-half profits.

However, despite the half-year outlook, Norkom’s chief executive, Paul Kerley said the company’s long-term prospects remain positive.

“The underlying growth in demand in the market is increasing, particularly for our packaged solutions. Demand in our sales channels is robust,” he added.

The company said it expects “a modest return” to revenue growth, on a year-on-year basis, in the second half of its financial year – with full-year revenues (for the 12 months to the end of March) anticipated to come in “at similar levels” to the previous year.

For the year to the end of last March, Norkom generated full-year revenues of €49.3m; up from €48m for the previous year. The company also said, earlier this year, that it is looking at the US as a potentially key region for its future growth.