Shares in Orion Health (OHE), one of New Zealand’s largest software companies, lost more than 15% at one stage yesterday after the company issued a profit warning for the year to March 31.
Orion told exchanges on both sides of the Tasman that it was facing delays closing a number of contracts and it expected to post a pre-tax loss of between $NZ32 million and $NZ38 million in its current financial year.
It said that would be after a small dip in revenues to between $194 million and $200 million.
Auckland-based Orion, which employs more than 1200 staff, said it remained committed to becoming profitable next year, but was undertaking a "strategic review" that could see it take on additional investment.
Chief executive Ian McCrae had previously said he was confident Orion could achieve profitability without tapping shareholders for additional funds.
“As the majority shareholder I am directly aligned with all shareholders and this is not the outturn we had targeted,” McCrae said in yesterday’s statement.
Orion’s shares closed down 11.6% cent to $1.59 in the wake of the announcement.
The shares listed in 2014 at $NZ5.70 price. Yesterday’s close was the all time low. Back in late November Orion shares 18% to a then record low of $NZ2.05.
The share price drop came after Orion posted a reduced loss of $NZ18 million in the six months to September 30.
Of more concern to investors was that it burned through $NZ33 million of cash leaving it with a cash balance of $NZ24 million. That seems to have continued and its cash pile has been further slashed to a skinny range of $NZ2 million to $NZ6 million at last Friday, March 31, its 2016-17 full year balance date.
The company attributed the cash outflow to its $NZ17 million operating loss and “abnormally large timing differences in receipts from customers”, which seems to be still impacting the company.
