Iomart Group PLC saw its share price plummet on Friday morning, following a reduction in its full-year earnings guidance.

Shares in the Glasgow, Scotland-based cloud computing and IT-managed services provider were down 24% at 44.90 pence in London on Friday morning. The stock has fallen 68% over the last year.

Iomart said it expects revenue for the year ending March 31 to be broadly in line with market expectations, citing a company-compiled consensus of between £142 million and £143 million. This would be up 12% at best from £127.0 million last year.

However, Iomart also expects to report adjusted earnings before interest, tax, depreciation and amortisation around 10% below current market expectations, citing a £37.0 million to £38.0 million forecast range. This compares to £37.7 million the year before.

The reduced earnings guidance was the result of an ‘accelerated shift in revenue mix towards higher growth, lower margin services’, Iomart said.

It anticipates lower adjusted pretax profit as a result, compared to a prior market consensus of between £10.1 million and £10.8 million. This would have been a 39% decline at worst from £15.0 million.

‘We have seen continued positive new order bookings across both the Iomart and Atech offerings and are starting to see the power of the combined business flow through,’ said Chief Executive Officer Lucy Dimes.

‘However, transformation takes time, and churn within legacy offerings continues to present a headwind. We will continue to optimise our cost structure, while pivoting the portfolio to higher growth segments, and are confident that we have the right team and offerings to achieve our bold ambitions.’

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