Biometric and RFID products provider RCG Holdings Limited (RCG.L), Monday said it expects to report a net loss for fiscal year 2012, at a level similar to that of the prior year, due mainly on lower revenues and margins.
Shares of the company lost more than five percent on the London Stock Exchange following the news.
RCG is in process of moving away from the lower margin distributorship model and is divesting less profitable and non-core businesses, amid its focus on the Solutions, Projects and Services segment. This has led to a sharp decline in revenues for fiscal year 2012 from the prior year, the company said in a statement.
Margins were also under pressure due to lower selling prices arising from stiff competition, coupled with increased cost of sales, resulting in higher negative gross margin than in the initial half of 2012.
RCG said its Board is reviewing the level of impairment provisions against the carrying value of trade receivables and stocks.
“This review, combined with the lower revenues and margins, is expected to result in a net loss position for the full year ended 31 December 2012 of the same order of magnitude as the previous year,” the company said.
RCG Holdings stock is trading at 4.10 pence, down 5.75%, on the London Stock Exchange.
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by RTT Staff Writer
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