Shares in Aquis Exchange PLC (AIM:AQX) fell 15% after it warned that profits would be hit by the non-renewal of a historical contract for its technology division with a start-up exchange.
This will result in roughly £1 million of net revenue and profit before tax not being received this year that had been expected.
For the first six months of 2024, the company generated net revenue of £10 million, up 3.5%, and said its technology division was otherwise seeing "very strong" growth in its contract pipeline to become the largest in the division's history.
Chief executive Alasdair Haynes said: "Whilst it is disappointing that our near-term trading has been impacted by a single contract, I am pleased with the progress that we continue to make in establishing the foundations to deliver our strategic objectives."
With cash levels having grown to £14.5 million from £13.9 million a year ago, Haynes announced a 'strategic investment' of £6.2 million into the Aquis Technologies division over the next three years, of which approximately £0.3 million will be expensed this year.
"The scale of our technology contracts has grown substantially in recent years, and Aquis is now considered a major and credible global player in the provision of regulatory-grade exchange technology.
"In order for us to fully capitalise on the opportunities in front of us, we have decided to adopt a more proactive strategy, building out our product suite across asset classes and furthering our significant technology and competitive advantage."
The company plans to provide further detail on the strategic investment to investors at its interim results and in more detail at a capital markets day in in the fourth quarter of the year.