Shares in respirator firm CleanSpace Holdings slumped 28% at one stage on Wednesday after surprising with a weak trading update.
The shares hit a new low of $1.36 after revealing a dramatic fall in second half sales. They later recovered to be down 10.3% at $1.70.
CleanSpace said it expected to report second-half revenue of $10.2 million – down from $39.7 million in the first half and taking full-year sales to $49.9 million.
That 70% plus in sales is expected to produce a loss of between $1.9 million and $2.1 million for the second half, and a full-year result of between $17 million and $17.2 million.
The company blamed the loss in revenue on US vaccination rollouts, oversupply of disposable masks, and extended lockdowns had disrupted purchasing patterns of its workplace breathing equipment.
CleanSpace however was upbeat, telling the market that despite the difficult period, continued high gross margins were is encouraging, given the shift in sales mix from higher-margin healthcare to industrial sales.
As well the business’s decision to retain experienced trained technicians to have greater flexibility to ramp up production when sales volumes return.
However, Wilsons’ analysts said the firm’s industrial sales miss for the fourth quarter was entirely at odds with the segment’s recent performance, and required further investigation.
CleanSpace shares initially soared when it hit the ASX last October, raising $131.4 million at an IPO price of $4.41 per share.
The company hit a high of $7.69 in January – giving it a market value around $600 million – but it has since lost more than 75 per cent of its value on the back of disappointing sales figures.
The company said in Wednesday’s update that it had $38 million in the bank at the end of June after making a $5 million tax payment. That was down from $41 million at the end of the first half.
The company is now valued at around $120 million.
CleanSpace’s market performance is similar to that of Nuix, the troubled financial forensic data tech float from last December when it listed at $5.31, saw its shares jump to an all-time high of $11.86 in late January, then collapse from March onwards because of trading downgrades, questions about its governance and pre-float performance and questions about insider trading by a now former senior executive.
There’s no guidance for 2021-22, the company saying in Wednesday’s update “Given conditions are expected to remain volatile in the medium term CleanSpace is not providing guidance for FY22. The Company will provide further information when it reports its audited FY21 results in August 2021.”
