Itim Group PLC on Friday said earnings will fall short of market expectations as it turns its focus to improving cash generation.

Itim shares were down 28% trading at 35.97 pence per share on Friday morning in London.

The London-based click-and-collect software firm said earnings before interest, tax, depreciation and amortisation are expected to be £200,000 below current market expectations, at about £200,000, collapsing by more than 90% from £2.2 million in 2021.

Itim said this was due to its increased cost base after self-financing its projects to drive growth, offering transitions to its platform free of charge.

Itim said its focus is now to improve its margins and cash generation, targeting a higher Ebitda margin during 2023, and a ‘substantially higher’ margin in 2024. The company said it will partially move away from its post-IPO strategy of self-financing projects, and focus on achieving higher revenue.

Itim completed its initial public offering on AIM in London in June 2021. The stock currently is well below its IPO price of 154p.

Chief Executive Officer Ali Athar said: ‘The board has invested heavily in the period which has impacted the bottom line in the short term; however, the group’s renewed focus is on margin enhancement and cash generation as it looks to further build shareholder value.

‘Selling additional services into our considerable existing client base is bearing fruit as we continue to see an increased demand for our products.’

Itim said 2022 revenue is expected to be in line with market expectations at £14.0 million, up 4.5% from £13.4 million in 2021.

The company added that annual recurring revenue has risen 17% to about £13.0 million, from £11.1 million a year ago.

Itim noted that it signed two new retailers in 2022, and has seen growth in its existing customer base. The company has almost 80 customers using all or some parts of its Retail suite platform, which it said will provide stable recurring revenue base and a mix of UK and international revenue growth.

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