Appen Announces Company Restructuring in Business Update
- Appen Limited jumps over 10 per cent on positive announcement.
- The company have announced structural and reporting changes.
- Further, Appen have reinstated previously provided guidance.
Appen Limited (ASX: APX) has today announced to the ASX their intention to implement a new organizational structure to lead the company out of softer trading conditions in recent months. The company's share opened trading today over 10 per cent higher, providing slight reprice from a precipitous decline of 70 per cent from the company's all-time highs. The most recent Update provided by the Artificial Intelligence services company has outlined a product-led and consumer-centric strategy as well as changes to financial reporting to drive future growth.
Appen Limited is an international company that provides a range of Artificial Intelligence services that provides language, search and social technology solutions to a wide variety of clients. The relevance and importance of artificial intelligence and data management in our increasingly technology-focused world places Appen at the forefront of a continually expanding industry.
The company, in recent months, has been under significant pressure due to a weaker US Dollar and Changing business conditions. As almost 90 per cent of the company's revenues are received in US dollars, the company's bottom line has been impacted significantly impacted by a weaker US dollar. Additionally, a number of Appen's major US clientele have either ceased partnerships with the company or is engaging in proportionally less with Appen's as they move tech operations internally. Today's update is most definitely a step in the right direction as Appen attempts to combat these issues.
The companies new organizational structure involves the direct alignment of consumer needs for different groups and markets, allowing a more streamlined approach to sales and product delivery. Appen will be separated into four distinct sections: Global, enterprise, China and Government: providing targeted solutions and attention to their respective clients. Each of these four segments will be supported by distinct service units, Product, Engineering, Human Resources and Corporate.
Further, the company will now report its results and value its assets in US dollars to remove expectations when reporting in Australian Dollar terms. This will flow into less share price volatility as well as easier comparison of financial statements and business activity.
Finally, a trading update has placed year to date revenues to the 30th of April at $260 million, which is in line with forecasts provided in May of last year. Underlying earnings before interest taxation, depreciation, and amortization is also expected to be in line with the same forecasts of $83-90 million.
Appen shares opened trading 0ver 10 per cent higher today at $12.44 per share, 70 per cent lower than all-time highs of $43. Since August 2020, Appen Shares have slid from this high, now trading well below the company's 200 days simple and exponential moving average.