Sirma Group Holding expects strong 4Q16 enabling it to meet top line expectations, the Company’s management said in a regular quarterly online meeting with investors.
CEO Tsvetan Alexiev added the Company’s plan is to grow the bottom line in parallel with the top line, yet considerable post IPO sales and marketing expenses to be a drag to this parallel move in the short term.
Sirma 9M top line along with forecasts
Sirma Group Holding booked 26.4% y/y rise in consolidated sales for the 9M16 to BGN 27m in line with management guidance. US, UK and Bulgaria were key growth markets with the fin tech, cloud and system integration services best performers. Public sector services underperformed expectations but management expects to compensate with better performance in the other verticals including manufacturing solutions.
Improved profits expected in 4Q 2016
Profitability, however, is below guidance as of September 2016 with EBITDA expanding only 10% y/y on 30% y/y management guidance for 2016F. Yet the latter anticipates a usually strong 4Q16, including improved performance from key product company – Ontotext. The latter delivered only 3% y/y top line expansion for the 9M16 but is bank on profit. Management expects Ontotext’s performance to improve by year end on stronger sales leads due to planned commercialization and marketing expenses post 2015 IPO.
Watch the recording of the online Investor Day on 7th December 2016