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The price of shares in AIM-listed IT company Castleton Technology (LON:CTP) has plunged by 41.77% to 54.15p (as of 14:35 BST) after it said that trading in the half year to 30th September had been behind expectations. Increases in recurring revenue have not offset one off reductions and therefore revenues, EBITDA, and cash generation are all lagging behind the same period of the prior year.
CEO Dean Dickinson commented: “The second quarter of the financial year has been significantly weaker than we expected particularly compared to the strong comparable period last year. This is primarily due to revenues of a one-off nature. Whilst this is difficult in the short term it highlights the importance of transitioning away from one-off revenues and focusing our efforts on growing our recurring revenues. In the first quarter of the year we reorganised the Group to streamline our sales and delivery functions. Embedding this has both taken longer and been more disruptive than we anticipated, however it positions the Group well for the longer term. Despite these short term challenges, we are confident that the move to ‘One Castleton’ will enable us to offer customers better service and drive future growth“.