Eagle Eye’s shares have tumbled more than 40% this week after the technology company lost a major contract with a US supermarket chain.
Eagle Eye, which powers loyalty programmes for supermarkets including Tesco, Asda and Morrisons, said the US deal was worth between $9m and $10m a year and would now end in August.
The contract was high-margin and a key contributor of the company’s US growth, the company said in an update to the London Stock Exchange. The termination would mean a cost-cutting programme was necessary to try to mitigate the impact.
Eagle Eye added it was confident the loss would have no impact on the group’s growth opportunities, “which remain strong”.
While next year’s revenue will be materially impacted, it expects to maintain double-digit profit margins and return to revenue growth in 2027.
“While the news of this contract termination is clearly disappointing, it reflects commercial changes at NRS, outside of our control, and we are taking measures to mitigate the financial impact of the loss,” said CEO Tim Mason.
“This is a short-term setback and the fundamentals of the business are strong. We have the industry-leading loyalty and promotions capability globally, with attractive growth prospects and an unchanged opportunity.”
Shares in the group sank from 352.2p to below 200p as a result of the news this week.
No comments yet