Deal delay to drag Escher sales down 15%

Annual revenue for 2014 at Irish-American specialist technology firm Escher Group is set to reduce 15% on a year-on-year basis due to the business failing to conclude a pending deal, as expected, prior to the end of the year.

In a brief trading update, the Dublin and Boston-based group said a sizeable licence agreement did not conclude before year-end.

The group mainly specialises in point-of-sale e-commerce software for leading international postal agents and other businesses,

Although, it said negotiations on the deal are continuing into the New Year, it said as well as the drop in 2014 revenues, adjusted earnings before interest, tax, depreciation and amortisation will be “materially below current market expectations”.

“The second half of the last financial year has been disappointing as considerable pipeline activity has not yet converted into finalised agreements,” said group chief executive Liam Church.

Escher had warned in November of a possibility of $2.5m (€2.11m) or so in new licence revenue not arriving until this year.

Analysts yesterday said the group’s 2014 revenues should amount to around $21m as a result, rather than nearly $24m.

“We are encouraged by the company’s reference to negotiations continuing into 2015, and consider it likely that the deal will still go ahead,” said Ross Harvey of Davy Stockbrokers.

The stockbroker has lowered its forecast for Escher’s 2014 adjusted earnings from $4.7m to around $2m as a result of the deal delay.