Big Technologies Slides on Loss of Colombia Tagging Contract
Big Technologies (LON:BIGB) experienced a steep decline of 26% in its stock as it announced the loss of a significant prisoner tagging contract with a major customer in Colombia. The company’s statement also revealed that costs are escalating due to its expansion plans into the US, which will impact margins until sales catch up with the investments.
Despite these challenges, Big Technologies reported revenues of £55 million (£50.2 million) for the year ending December, along with underlying profits (adjusted Ebitda) of £35 million (£30.5 million) in its recent trading update. However, sales in 2024 are projected to decline to approximately the same level as in 2022 (£50 million), contingent upon the situation in Colombia.
Looking ahead, the company expects a return to growth in 2025.
The loss of the prisoner tagging contract in Colombia comes as a blow to Big Technologies, resulting in a significant decline in market value. With the company’s expansion into the US underway, costs are rising, leading to narrower margins until sales catch up with the investment. The impact of these challenges overshadowed the positive trading update, which highlighted robust revenues and profits.
In response to the situation, a company spokesperson stated, Losing the contract in Colombia is undoubtedly a setback for us. However, we remain focused on our expansion plans in the US and are confident in our ability to regain momentum and return to growth in the near future.
The statement emphasized that sales for the current year are projected to drop to a level similar to that of 2022, dependent on how the situation unfolds in Colombia. The company remains cautious but optimistic about the possibility of a bounce-back in subsequent years, aiming for a return to growth in 2025.
Big Technologies’ stock decline highlights the challenges faced by the company, but its solid financial results and strategy for future growth provide a glimmer of hope for shareholders.
