Northcoders Group PLC, the Manchester-HQ’d firm which trains aspiring coders, saw its stock tumble 38 per cent in early trading after it issued a profit warning to investors.
Shares had recovered to 133p by 10am, still down around 30% over yesterday’s 188p close, but an improvement on an earlier low of 111.05p.
The group had reported a 50% revenue hike and £4.5m of new fundings in its H1 results in July, however this morning warned that workforce reductions and recruitment freezes had led to many corporate clients deferring business in the face of the current slowdown in the tech sector.
“In particular, one client is undergoing a substantial business reorganisation leading to a division closure,” investors were told.
The group said it is actively collaborating with the client during this transitional phase and remains optimistic about the possibility of future work and contract fulfilment, as the client has expressed a keen interest in continuing the partnership. However in the immediate term, the client’s requirements are likely to fall below the expected £0.75m.
As a result of this contract, and more cautious tech training market conditions generally, the group now expects revenue and profits for the year as a whole to be significantly below current expectations.
CEO Chris Hill said: “As outlined at the trading update in July, the market continues to be challenging, with budget constraints, workforce reductions, and recruitment freezes affecting the Business Solutions division, which means our growth in the short term is expected to be slower than previously expected.
“Nonetheless, Northcoders remains a key enabler of growth and innovation and we are resolute in our pursuit of evolving to meet technology’s ever-changing demands, confidently providing sustainable long term growth for all our stakeholders.”
