Cirata PLC on Thursday said that it had borne the brunt of its March accounting ‘irregularities’ throughout 2023, with the company’s sales pipeline ‘coming to a standstill’ and leading to a weak set of results for the year.
Cirata is a South Yorkshire-based software solutions provider, known until October as WANdisco, specialising in data transfer and integration into cloud platforms. Shares in the company were down 29% at 42.50 pence each in London on Thursday around midday.
Cirata delivered $6.7 million in revenue for 2023, down 31% from $9.7 million a year prior.
The company’s pretax loss widened to $36.5 million from $29.6 million.
Its adjusted loss before interest, tax, depreciation and amortisation narrowed to $24.2 million from $30.7 million, though this excludes $4.2 million in advisor costs relating to the sales ‘irregularities’ saga.
Bookings for the year were $7.2 million, down 37% from $11.5 million.
Per share, Cirata’s loss narrowed to 41 cents from 47 cents.
Cirata said that the poor performance was partially down to ‘deal slippage’, with some orders scheduled for the fourth quarter completing in the first quarter of 2024.
However, the largest toll on Cirata’s results, which demanded ‘continuous firefighting’ by the company, related to the ‘irregularities’ in its 2022 accounts.
In March of 2023, the company was investigated by the UK Financial Conduct Authority, after it came to light that a significant portion of its 2022 revenue and bookings may have been falsified by one senior sales employee.
In April 2023, Cirata confirmed that its 2022 revenue should have been $9.7 million and not $24 million as previously reported, while bookings should have been $11.4 million, instead of $127 million.
As a result of the scandal, ‘some customers and partners placed the company on their ’watchlist’, leading to a pause in activities and the then embryonic sales pipeline coming to a standstill’, Cirata said.
Looking ahead to 2024, the company expects to deliver $13 million to $15 million in bookings, which would represent growth of between 81% and 108% from the past year’s performance.
Cirata also hopes to exit 2024 at cashflow breakeven.
Chief Executive Officer Stephen Kelly said: ‘Cirata is currently undergoing a comprehensive rebuild from the ground up. The company faced challenges in terms of governance, a [go-to-market] strategy that failed to deliver sustainable growth, and a prevailing corporate culture at odds with the company’s commercial reality. FY24 needs to evidence a transition to growth. The guidance provided by management indicates improving pipeline and visibility.’
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