Symphony Environmental expects lower earnings amid Middle East delays
Source - SMW
Symphony Environmental Technologies said it expected revenue to rise about 6% in the year through December, though sales in the Middle East had been lower than expected.
Margins were expected to be lower than historical levels and the company forecast lower annual earnings of £0.10m.
The timing of orders placed by distributors in the Middle East had been fluctuating from month-to-month due to varying delays and delays in local enforcement action, the company said.
'Over the next six months, our market intelligence indicates an improvement in government enforcement actions and this, combined with an increase in the direct sales force of our Middle East distributors, is expected to generate a substantial increase in sales volumes, albeit the timing is not yet clear,' it added.
'Activities in Symphony's other global markets are encouraging as d2w revenues generated from sales in Central America, the Far East, Europe and Africa are all growing ahead of budget.' The gross margin generated in the first half of the year, at 47.4%, was lower than the around 49% historically achieved.
The fall was principally due to increased lower-margin finished product sales, with that level of sales mix and gross margin expected to broadly continue for the full year.
Symphony also said it expected to increase its communications and marketing spend by £0.38m for the year.
'The combination of the above means the Board expects full year earnings to be approximately £0.10m,' Symphony said.
'This figure includes the additional communication and marketing costs of £0.38m and expensed R&D costs, which for 2018 are expected to be broadly in line with the previous year at £0.63m.
'The board remains confident that the group will continue to meet 2019 expectations.'