Pulsar Group PLC shares slumped on Friday as it said it expects to report a drop in full-year revenue amid a ‘challenging environment’.

Shares in the London-based software-as-a-service provider for the marketing and communications industries were down 7.3% to 50.50 pence in London on Friday morning.

The company said it expects total revenue for the financial year to the end of November 2024 to have fallen 0.6% to £62.0 million from £62.4 million year-on-year.

The company said there was ‘modest constant currency growth’ of 1.3% to £62.0 million from £61.2 million.

Annual recurring revenue rose 0.7% to £61.7 million from £61.3 million in the 2023 financial year.

ARR in the Asia Pacific region fell by 3.2% to £30.6 million from £31.6 million, due to increased competitive pressure in the second-half, particularly from the public sector.

The firm said a key driver of ARR growth was an increase in renewal rates, which it says shows the positive impact of the group’s products on customers.

Pulsar said it delivered adjusted earnings before interest, tax, depreciation and amortisation growth of 27% at constant currency in financial 2024 to £9.0 million, with the adjusted Ebitda margin improving to 14.5% from 11.9%.

The company expects to post a reported adjusted Ebitda rise of 23% from £7.3 million year-on-year.

Net debt was around £4.9 million on November 30, due to ‘significant additional non-recurring restructuring costs’ as the company accelerates its ‘cost base optimisation programme’.

Pulsar said it has received a number of significant payments since the period end.

The company said it is committed to enhancing its operating model in 2025 and is confident that further measures ‘will create a solid foundation for sustained value creation’.

Chief Executive Officer Joanna Arnold said: ‘The board is pleased with the progress achieved in 2024, including enhancements to the group’s product offerings and continued year on year growth in annual recurring revenue and adjusted Ebitda margins despite the ongoing headwinds from the challenging macroeconomic environment.

‘The group is committed to enhancing profitability and cash generation, having already achieved substantial cost reductions and with additional cost optimisation initiatives set for execution in 2025.’

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