Shares in Getmobile Europe lost two-thirds of their value yesterday after the mobile phone services group said its results this year would be "materially" below expectations. This is the group's second profit warning in less than a year.
At its agm in May, the company, which is listed on Dublin's IEX, told shareholders that its performance was broadly in line with expectations. However, in a statement released to the stock exchange yesterday, Getmobile said that since then it had become clear that market conditions were more difficult than expected.
It said that while sales of mobile phone contracts in Germany had remained steady, increased competition and a tendency for people to switch from post-paid contracts were hurting sales and reducing the group's ability to win new business.
The company also said that its own TV channel had performed in line with expectations, but that a major third-party TV shopping channel had significantly underperformed.
In a note to investors, Davy said this decline was particularly alarming as third-party channels accounted for about 70 per cent of the company's sales contracts last year.
On the back of the statement the broker reduced its forecasts for earnings before interest, tax, depreciation and amortisation by €4 million to €1 million for this year. This follows an earlier downgrade in October at the time of the group's previous profit warning.
Getmobile, which is chaired by entrepreneur Pierce Casey, said it now plans to focus on reinvigorating its current product mix and sourcing new products.
The shares fell 22 cent to close at 11 cent.
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