Webcentral gets set for 15% revenue tumble
- 14 August, 2020 15:10
After another turbulent period, the company formerly known as Arq Group has flagged a 15 per cent revenue dip in its preliminary results.
Webcentral, as it is now known, has forecast revenue on the range of $29 million to $30 million for the year ending 30 June 2020.
The results coincided with the completion of Webcentral’s former enterprise business to US company Web.com for around $12.2 million.
In its unaudited results, the publicly listed company posted underlying EBITDA in the range of $3.5 million to $4.5 million, an 18 to 22 per cent decline on last year.
Meanwhile, its early results suggested cash out flow of around $10 million due to expenditure on working capital payments required upon sale of the enterprise business, interest and bank fees and costs associated with its cost reduction program.
In a statement to the ASX, the company noted that the COVID-19 pandemic continues to affect its business and to “reduce its cash receipts to a far greater extent than its costs”.
It also noted that it will continue to observe a sustained reduction in small business spend away from digital marketing and online business promotion.
The results come off the back of a difficult year for what-was-then Arq, starting with the sale of its TPP Wholesale Reseller arm, the resignation of CEO Martin Mercer in September and finally the sale of its enterprise services business, which closed last month.