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Pelatro PLC on Tuesday said it is in the advanced stages of renegotiating a licence contract for its mViva product, while it expects 2022 revenue to drop..
The London-based marketing software specialist said it hoped to convert the licence contract into a managed services contract.
If renegotiated, the contract would give the company a recurring revenue of just under $400,000, and would allow the contract’s termination after three years with prospective renewal under revised terms, instead of a permanent contract.
The cash flow and profile of the contract, entered into by the company earlier in 2022, would remain broadly the same, it said.
The company said it agreed terms for another licence contract in late 2022, which it expected revenue to accrue in 2022, but will now be recognised in early 2023. Pelatro said the impact on 2022 revenue would be about $1.5 million.
Pelatro added that it has been unable to agree on the implementation terms of a licence contract entered into in 2021 with a small customer, its potential withdrawal from which would lead to a provision of about $300,000 being made against the carrying value of the contract.
The company expects outturn in 2022 to be materially below current market expectations as a result of $2.4 million revenue adjustments, but that these adjustments will be recognised and contribute in following years, Pelatro said.
Pelatro shares were down 27% trading at 8.90 pence per share on Tuesday afternoon in London.
By Harvey Dorset, Alliance News reporter
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