Irish virtual reality company Engage XR shares fell on Monday after warning that its revenue for last year will come in below market expectations as a result of business from the Middle East drifting into the first half of 2025.
The company, which delisted from the Irish stock market in 2023 to focus on its London quotation, said that it expects to report revenue of €3.4 million for last year, down from €3.7 million for the previous 12 months.
It also forecast a loss before interest, tax, depreciation and amortisation of about €4 million, unchanged from 2023 and broadly in line with market expectations.
Shares were down 8.3 per cent in midday trading, bringing their decline over the past 12 months to more than 75 per cent.
The company, once known as Immersive VR Education, specialises in in cutting-edge virtual and augmented reality solutions that are used for training events and educational proposes. Its rollcall of clients globally including Facebook-owner Meta, banking giant HSBC, laptop maker Lenovo and pharmaceutical giant Pfizer.
Engage XR secured a number of important contracts in the education and training sector last year, including a significant seven-figure million contract with a large Middle Eastern client via the group’s partnership with PwC. Client approval was finalised later than expected, but has now been completed, and full deployment is expected to begin in the first half of this year, it said.
This means the remaining revenue associated with the contract of €400,000 was not booked last year.
Another significant contract was also expected to be finalised by the end of December in the Middle East which would have led to the group’s revenue target being comfortably achieved. However, this has been delayed into the current quarter.
“While it is disappointing that the delay in our new Middle East contract hit revenue recognisable in 2024, given the strength of the pipeline, we expect 2025 to be a strong year and remain confident in delivering our strategic objective of cashflow break-even in 2025,” said chief executive David Whelan, who founded the company eight years ago with his wife, Sandra Whelan.
“The education and training sectors will be the primary drivers of growth,” Mr Whelan said. “We are working with Meta and its partners on creating an education offering to eclipse others in the sector and we expect to compete strongly on pricing and services. We start 2025 with a strong client base, supported by our strategy of securing two- to three-year contracts with many of our partners in the education and training sectors. This ensures a stable foundation for continued growth and innovation.”
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