Mobile marketer CDialogues (CDOG) is having a bad day after being issued with a notice of termination on four contracts with its sole partner, causing a sharp fall of 25.6% to 30.5p as investors grow concerned about the company’s future.
CDialogues provides a combination of solutions, data analytics and linguistic engineering marketing to build awareness and increase sales for mobile network operators in emerging markets.
The business works with Numbase as a partner instead of targeting mobile operators directly and generates revenue using a recurring subscription-based model.
The termination notice concerns four contracts, which account for all of CDialogues’ revenue. These include two marketing campaigns to Alfa and Touch in Lebanon and another two for Zain and VIVA in Kuwait.
CDialogues is in discussions with Numbase in a bid to seek an alternative outcome. However, if the contracts are cancelled, they will be terminated by the end of September at the latest.
The situation for the marketer looks grim as the board says it’s unlikely to get any new contracts until the market improves. It plans to conduct a review of the business to find ways to mitigate losses and sustain cash balances. Its last reported cash position stood at €3.5 million.
In the full-year results to 31 December 2015, CDialogues’s pre-tax profit more than halved to €980,000.