(Alliance News) - Mission Group PLC shares plunged at the London open on Monday, after the company warned that 2023 profit will be less than half of market expectations and cancelled its previously declared interim dividend.

Barnstaple, England-based Mission calls itself a "collective of digital marketing and communications agencies".

Shares were down 60% to 13.50 pence on Monday morning in London, having hit a new low of 11.00p earlier.

Mission said that, since its interim results announcement in late September, "trading has become rapidly more challenging than previously anticipated".

At the time, it said it expected the majority of 2023 profit to be generated in the second half of the year and full-year profit to be ahead of 2022. Headline pretax profit was GBP7.8 million in 2022 and GBP1.0 million in the first half of 2023.

On Monday, Mission said headline pretax profit will be no more than GBP3.1 million, compared to market expectations of GBP7.9 million. The expected outcome includes GBP1.2 million in costs relating to a business that is expected to be classified as discontinued at the end of the year, it noted.

Earnings before interest, tax, depreciation and amortisation is expected to be no more than GBP9.0 million. Headline operating profit in 2022 was GBP8.7 million.

Revenue growth in 2023 is expected to be 8% to 9% from 2022's GBP79.8 million, including the impact of acquisitions.

Mission said net debt has risen as a result of the worsened trading and a reduction in pre-payments by some clients. It currently stands at GBP25.5 million, up from GBP14.9 million on June 30, and is expected to still be at GBP24.0 million by December 31.

As a result, the company said its board has decided "in the best interests of shareholders" to cancel the 0.87 pence interim dividend declared back in September. This had been due to be paid on December 1. Mission said it will review any final dividend for 2023 considering trading conditions and its cash position at the time of the final results release.

"The board is extremely disappointed by the recent adverse change in current trading, and the outlook for the remainder of FY2023," Mission said.

"Notwithstanding these short-term trading challenges, the board believes that Mission's strategy of deliberate investment in its people and capabilities, when combined with operating cost reductions, leaves the group well positioned as markets improve."

By Tom Waite, Alliance News editor

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