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Highlights:
- Share Price Decline: Directa Plus PLC's shares dropped after warning of revenues well below.
- CEO's Confidence: CEO Giulio Cesareo noted short-term challenges but remains optimistic about securing new contracts for Setcar.
- Strategic Goals: The company aims for breakeven EBITDA by fiscal 2025 while addressing a revenue decline and an increased EBITDA loss.
Directa Plus PLC (LSE:DCTA) experienced a significant decline in its shares, falling, following the issuance of a profit warning in conjunction with its first-half results. The graphene specialist's founder and CEO, Giulio Cesareo, indicated that revenues for the full year are projected to be "materially below" market expectations, which typically anticipate revenue around €15 million and an underlying EBITDA loss.
Cesareo attributed the company’s challenges to short-term headwinds and an extended timeline for a substantial tender related to Setcar, the environmental services subsidiary in which Directa Plus recently increased its stake to nearly 100%. He stated, “We are experiencing shorter-term headwinds, together with an extended timeline for the award of a substantial tender for Setcar.”
Despite these setbacks, the CEO expressed confidence in the company’s position to secure new material contracts from a growing pipeline of opportunities, particularly for Setcar. He noted, “We believe we are in a strong position to convert new material contracts and benefit from a robust financial platform.”
As part of its strategic initiatives, Directa Plus aims to strengthen its commercial capabilities to drive growth, which includes efforts to further reduce direct production costs and restructure Setcar for improved short-term returns. The goal is to achieve a breakeven EBITDA run rate by the end of fiscal year 2025.
The half-year results highlighted a revenue of €3.39 million, down from €4.59 million in the same period the previous year. This decline was mainly attributed to the delayed commencement of several large contracts and a strategic shift towards securing higher-value contracts. The reported EBITDA loss increased to €1.8 million, compared to €1.25 million in the prior year, while the loss before tax rose to €2.5 million from €1.9 million.
At the end of the reporting period, the company had cash reserves of €0.93 million. A capital raise conducted in early July improved the bank balance, reaching €6.06 million by the end of August.
As Directa Plus navigates these challenges, the focus remains on optimizing operations and capitalizing on potential opportunities to restore shareholder confidence and enhance financial performance moving forward.
