Pelatro shares lifted as new deals outweigh guidance upset

The share price of AIM-listed marketing software specialist Pelatro (LON:PTRO) surged 32.25% to 52.90p (as of 13:40 GMT) after the company announced that it had won a deal with a major Asian telecoms firm worth between $10 and $12 million over the next five years. Management said that this was one of several contracts won this year, but due to the nature of the deals, revenues recognised in the current period will be minimal and full-year figures will be below current guidance despite a substantial improvement in contracted income.

Managing Director Subash Menon commented: “We are delighted with this very significant contract win which validates the quality of our software, especially in the context of its relevance to Tier 1 telcos. It also marks a major shift for our business in terms of moving towards a recurring revenue model and enhancing our quality and visibility of earnings materially. Whilst it is disappointing to fall short of expectations for the full year, the decision to target a different revenue model, and a different type of contract has been taken for the long-term benefit of the Group, shareholder value and we are encouraged by the strength of the pipeline of opportunities going into the new financial year. The Board remains confident that Pelatro is very well positioned to capitalise on the large long term opportunity. We are focused on higher quality recurring revenue and steady cashflow“.