Alterian slides on delays warning

Shares in Alterian fell by 17 per cent on Tuesday after it warned of delays to UK and European orders of its marketing software.

If the delays persist into the crucial fourth quarter, Alterian could miss its full-year revenue targets, the company warned. Alterian’s shares closed 32¼p lower at 158p.

Alterian reported 17 per cent revenue growth at constant currencies for its third quarter to December 31.

But in late November, a handful of large contracts in the UK and Europe were deferred until after the end of the financial year. As a result, revenues were “broadly flat” in that region compared with the third quarter of 2008, Alterian said in a statement to shareholders.

The sales shortfall was partially offset by an “exceptional performance” in the US, where some contracts closed earlier than expected.

“If the close rate of the UK and European pipeline continues at [third-quarter] exit rates, higher-than-anticipated revenues will be needed from the US and other international markets in the fourth quarter in order to fully achieve market expectations for the full year,” Alterian said.

David Eldridge, chief executive, said that the company was “just being a little cautious”, after two UK contracts were postponed until after March. “The overall business is doing very well,” he said, even thought the UK business has “not grown the way we would like it to be”.

But he added: “If we continue to see contract deferrals in the UK and the bigger European markets, that is a big number to make up … It remains tough in Europe in getting ink on paper.”

Alterian’s new software to monitor what people are saying about brands on social networks such as Twitter and Facebook were seeing “good takeup”, he said, with e-mail marketing tools also selling well.

Analysts at Canaccord Adams cut their forecasts for the year to March 2010 by 7 per cent to £39.3m and adjusted earnings per share by 23 per cent to 12.8p. “We remain optimistic on Alterian’s medium- and long-term growth potential,” they said.