Altitude Group shares slide on first-half update
By Josh White
Date: Friday 15 Nov 2024
(Sharecast News) - Shares in branded merchandise specialist Altitude Group were sliding on Friday, even after it reported robust trading for the six months ended 30 September, with revenue expected to rise over 20% year-on-year and adjusted operating profit up 9%.
The AIM-traded company said its 'Gear Shop' programme, a solution for collegiate merchandise, continued to expand, as it signed a new university to the programme and was negotiating with another, bringing the total to 20 contracts across 23 locations.
It said the Gear Shop initiative was expected to generate annualised average revenue of about $9.5m.
The ACS affiliate programme also saw substantial growth, with annualised run rate revenue rising 16% to $21.4m, aided by record monthly invoiced sales exceeding $2m during the period.
While Altitude said its services division had provided a stable foundation, the promotional products industry was facing headwinds from economic uncertainty, rising interest rates, severe weather events, and distraction from the US election cycle.
However, recent indicators showed a return to growth, with the sector expanding nearly 5% in the third calendar quarter.
Looking ahead, Altitude said it was confident in its ability to deliver on its strategic goals despite a challenging environment.
The group said it anticipated growth momentum to continue, supported by operational progress and an improving economic backdrop following the US election.
It added that it remained on track to meet full-year expectations.
"The group remains focused on delivery across all divisions - we are pleased that we have continued to drive profitable growth and invested in people and systems to achieve greater operational gearing during challenging market conditions," said chief executive officer Nikki Stella.
"The group anticipates the return to industry growth to extend into the new financial year.
"The board remains confident that it will continue to deliver on its strategy, and we look forward to further updating shareholders with our interim results in December."
Altitude said it would announce its interim results for the period ended 30 September on 3 December.
At 1228 GMT, shares in Altitude Group were down 16.21% at 28.49p.
Reporting by Josh White for Sharecast.com.
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