Shares in Ten Lifestyle (TENG:AIM) lost almost a quarter of their value, dropping 23% to 82p after the global concierge platform for the wealthy and mass affluent flagged full year adjusted earnings would be below expectations due to reduced member requests caused by Omicron disruption.
This was the latest downgrade from the loss-making, cash burning tech-enabled lifestyle and travel platform, which listed on AIM in late 2017 and has been hard-hit by the impact of the pandemic on the travel industry.
ANOTHER DOWNGRADE
In a brief statement, Ten Lifestyle warned adjusted EBITDA (earnings before interest, taxes, depreciation and amortisation) for the year to August 2022 would fall short of expectations.
Despite missing estimates, the £90 million market cap firm still expects to report growth on the prior year’s £4.4 million haul.
For the uninitiated, the London-headquartered company partners with blue chip corporate clients to help wealthy and mass affluent individuals and their families organise and enjoy fine dining, live entertainment, travel and premium retail with better value and easier than they could themselves.
During a period of strong recovery last autumn, Ten Lifestyle took on additional staff only for Covid to derail momentum with the emergence of the Omicron variant resulting in ‘reduced member requests’ since December.
Ten Lifestyle’s costs have risen as it has kept the extra staff members on ‘to support new contract launches and the expected recovery of existing contracts’.
CONFIDENT IN THE RECOVERY
Guided by chief executive Alex Cheatle, the company is confident the negative effects of Omicron will be mitigated by new contract wins and a recovery in existing contracts as the pandemic eases in each region.
‘We have started to see an increase in activity again in February in Europe, the Middle East and Africa, where Omicron first impacted in late November,’ explained the company.
Expectations for the full 2023 financial year remain unchanged and the firm insisted it continues to enjoy ‘a healthy pipeline of new business and high conversion rates’.
Ten Lifestyle, which had £4.7 million net cash at the end of February, down from £6.7 million a year earlier, also stressed the effects of the conflict between Russia and Ukraine on the business is expected to be ‘limited’, as only 1%-to-2% of its annual net revenue relates to Russia and the directly affected region.
