Castleton Technology plc announced financial results for the six months ended 30 September 2019. The company generated revenue of not less than £11.6 million, adjusted EBITDA of not less than £2.9 million and cash generation in the period of not less than 79% of adjusted EBITDA, facilitating a continued reduction in the Company's net debt compared to the prior year. Recurring revenue has increased on an absolute basis and represented approximately 65% of total revenue in the period. Trading in half year 2019 has been behind expectations, primarily due to product and professional services revenue being lower than anticipated. The increase in recurring revenue has not been enough to offset the reduction in one-off revenue, and as a result of this, revenue, EBITDA and operating cash are lower than the strong comparable period last year.

The Company is confident that revenue, EBITDA and cash generation will show a material improvement in the second half of the year. This is not expected to be sufficient to meet current market expectations. Despite this, the Board remains confident in the long-term prospects of the Group with the anticipated effects of the merging of the Company's managed services and software divisions starting to come through.