LONDON (Alliance News) - Arena Events Group PLC on Thursday said it has experienced operating l issues at its UK division in 2018, leading to a reduction in profitability.
The stock was trading down 34% on Thursday at 38.00 pence each.
The event seating and furniture provider said it expects revenue for the year to the end of December to be in-line with expectations, and adjusted earnings before interest, taxes, depreciation, and amortization in a range of GBP12.0 million and GBP12.5 million.
In 2017, the company reported adjusted Ebitda of 10.6 million.
The US division exceeded expectations, Arena Events said, with several large projects being delivered successfully in 2018, while the Middle East unit performed in line with expectations.
Whilst the UK Structures & Scaffolding division exceeded revenue expectations, an increase in new and one-off projects resulted in the division experiencing operational issues, Arena Events said. As a result, the company's costs increased on service of these events.
The operational issues are now being addressed, including a number of senior management changes within the division, the company noted.
However, Arena Events said these issues have led to a material reduction in the overall profitability of the UK division.
Arena Events said the last quarter of the calendar year has always been an extremely busy period, with a significant proportion of its earnings delivered during this period. The company is therefore considering moving its financial year end to achieve a more balanced split.
Looking ahead, the company said it entered 2019 with a number of new contracted projects and therefore expects a material increase in earnings.
"Whilst the operational issues in the UK division are clearly disappointing, we remain confident in the group's strategy and long-term prospects, and are pleased to announce that we have recently secured contracts for the 2019 Rugby World Cup and the 2020 Olympics, which gives the board confidence in the future prospects for the group," said Arena Events Chief Executive Greg Lawless.
The company said it plans to publish its 2018 results in April.
