Shares in an Anglo-Canadian semiconductor company plunged after it warned the merger of two large artificial intelligence (AI) customers in South Korea would hit business.
Alphawave IP Group said the Korean tie-up alongside delays to the final design of chips have affected its outlook.
As a result, the London-listed company expects to report
revenues of £233million to £248million and profits of £38million for 2024.
This will fall short of the £259million to £274million of revenues and £53million profit it previously forecast.
Shares hit: Alphawave IP Group said the merger of two large artificial intelligence customers in South Korea alongside delays to the final design of chips have affected its outlook
Shares, which plunged 13.8 per cent, or 17.2p, to 107.8p, remained a far cry from the listing price of 410p in May 2021 that valued the company at £3.1billion.
Sales at Alphawave more than halved to £68million in the six months to the end of June as it brought in revenues from 12 fewer customers compared with the year before.
A fifth of sales came from Chinese clients – down from 66 per cent a year earlier – as the company pivoted away from the country.
Alphawave swung from a £24.3million profit to a £9million loss during the period.
The firm, which was founded in 2017, makes chips that it hopes will power the next generation of AI and cloud infrastructure.
The FTSE 100 rose 0.4 per cent, or 29.72 points, to 8259.71 and the FTSE 250 inched up 0.1 per cent, or 13.28 points, to 20845.12.
WH Smith announced it will buy up to £25million of shares from investors between now and April next year. The retailer’s stock rose 2.1 per cent, or 29p, to 1429p.
Stock Watch – Oxford Metrics
Oxford Metrics issued a profit warning as customers reined in spending.
The software company expects profits to be ‘materially below’ the £7.8million analysts pencilled in for the year to the end of September. Revenues should be in the range of £40million to £42million – falling short on
market forecasts of £48.6million.
The subdued outlook came as the group said customers became more cautious.
Shares tumbled 21.2 per cent, or 16.8p, to 62.4p.
Currys soared after analysts at Berenberg raised the electronics retailer’s target price from 92p to 125p.
The broker said the company’s turnaround plan has succeeded in cutting costs and expects cash to be freed up as its pension deficit should be paid down in three years’ time. Shares gained 8 per cent, or 6.3p, to 84.7p.
But the luxury consumer is all ‘shopped out’, according to the Bank of America, which warned the industry’s slowdown is likely to continue into next year.
Burberry was among the casualties of the gloomier outlook as analysts slashed the British fashion label’s target price from 700p to 475p. Shares dropped 0.9 per cent, or 5.4p, to 599p.
Also down was private equity firm Bridgepoint after analysts at Stifel raised the target price of the French software provider it is hoping to buy to €285. The broker said the firm’s offer of €262 per share is fair but warned it may not be high enough to prevent a potential bidding war.
Brigepoint shares fell 2.9 per cent, or 9.8p, to 329.8p. Recruitment firm Hays sank following a broker downgrade.
Analysts at Exane BNP Paribas lowered their rating due to concerns over the industry’s trading and weakness in the company’s key German market. Both factors could affect the its ability to pay special dividends in the future, the broker added. Shares dropped 3.1 per cent, or 2.9p, to 90.9p.
Capita extended its deal to support the roll-out of smart meters in the UK for another two years. Shares in the BBC licence fee collector rose 3.9 per cent, or 0.76p, to 20.3p.
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