Wynyard performance 'dreadful'

Craig Richardson, Wynyard Group. Photo / File

The performance of intelligence software developer Wynyard Group has been described as "dreadful" by analysts, after it more than doubled its first-half loss and halved its full-year guidance.

The net loss widened to $36.3 million in the six months ended June 30, from $17.6 million a year earlier.

Operating expenses rose 49 per cent to $38 million as revenue increased 4.5 per cent to $12.8 million. Brian Gaynor from Milford Asset Management, which owns 7.5 per cent of the company, said a combination of mistakes had led to the poor result.

"It's definitely been a dreadful performance from the company," Gaynor said. "Poor governance, poor management and poor performance really so what can we say - it's been very, very disappointing."

The company slashed its full-year earnings guidance to between $27 and $30 million from a previous range of $54 to $65 million.

This excludes a $27 million government contract the company announced in January.

"It's been a tough first half for everybody; employees, your board and shareholders alike," chair Guy Haddleton said.

"Most growth enterprise software companies deliver the bulk of their new revenue in their second half and Wynyard is no different in this regard.

Given the significance of the very large contracts we believe a prudent approach to revenue forecasting is necessary. None of the large deals in our pipeline have been lost - we're making good progress but wish to be cautious in setting market expectations."

Haddleton said the company was in a better shape to deliver on opportunities in the second half as it had implemented $17 million of annualised cash savings in the second quarter.

"They got way ahead of themselves," Gaynor said. "They anticipated that they were going to sign certain contracts and that these were guaranteed.

In business though, you have never got something until it is signed, and until you have an unconditional agreement, and they didn't."

Wynyard has this year revamped its board and restructured into two units while embarking on a cost-control strategy after a disappointing 2015 performance.

Its shares recently traded at 37 cents and have tumbled 79 per cent this year.

The share price has fallen since a disappointing annual result in February, where revenue of $26.3 million was well below the forecast $40-to-$45 million, followed by a heavily discounted rights issue in March to raise working capital.

"Is it going to turn around, well the shareprice will tell you what people think - there's obviously huge scepticism," Gaynor said.

"But they are in a very good industry and a very good spot - there's a chance of it, but only time will only tell."