North East technology firm Stadium Group loses ‘significant’ customer
Full year results at global wireless solutions firm Stadium Group are set to be affected after losing a significant customer.
The Hartlepool -headquartered firm issued a trading statement, telling shareholders how a wireless customer in the telematics sector has told directors they are moving product design in-house and manufacturing elsewhere.
Losing this customer will result in a delay to the company’s anticipated growth and full year results for 2016 are now expected to be below market expectations.
However, the Teesside firm, which employs 750 people across the UK and Asia, said it is making significant progress in transitioning Stadium from an electronic manufacturing services company to a design-led technology business.
The company has developed a more robust and focused operating model as part of it strategy, by establishing strategically-located design centres, manufacturing centres of excellence and regional fulfilment centres, to support further growth across the company.
The firm’s Technology Products division has also contributed more to the firm in the first half of the year, and the strong order book has risen by 20% since its preliminary results announcement in March 2016.
For the full year, higher margin Technology Products revenues are expected to contribute approximately 60% of total revenues.
The recently acquired business – Reading-based Stontronics – also continues to perform in line with expectations.
Together with benefits of a reduced fixed cost base and ongoing efficiency savings, directors say the company will deliver high single-digit percentage growth in normalised pre-tax profit and the board is confident that the company will return to its higher growth trajectory in 2017.
Charlie Peppiatt, chief executive officer of Stadium Group plc, said: “We are clearly disappointed to lose a significant wireless customer during the period and there’s no doubt that this sets us back temporarily in terms of our ambitions for growth.
“Frustratingly the establishment of our new regional design centres didn’t happen quickly enough for this particular customer.
“However, this reinforces our belief in the strategy of building strong design capabilities in the right locations and we are confident that we now have the teams in place to drive the significant growth expected in 2017 and beyond.”
Stay right up-to-date with TechSparx. Read North England (North West, North East and Yorkshire) regional business technology news aggregated and also written by us, all in one place on TechSparx. Curated and brought to you by TechSparx.
