Haydale (AIM:HAYD) warned that revenue for the financial year ended 30 September will come in at approximately £5m, well below market expectations of around £8m.
The advanced materials and clean technology group, said the adjusted EBITDA loss for FY26 is expected to be approximately £2.69m, wider than the around £2m the market had anticipated.
Haydale said gross margin improved to approximately 44% for the full year, up from 37.9% at the half-year stage, and that the year-end cash position will be ahead of market expectations.
The company attributed the shortfall to delivery capacity constraints within its SaveMoneyCutCarbon (SMCC) business rather than weak demand, saying opportunities generated through SMCC's "Impact Partner" relationships had grown faster than its existing infrastructure could economically service, particularly in the final quarter.
Delays in the commercial ramp-up of JustHeat, its graphene-enabled underfloor heating product, also weighed on revenue recognition during the year.
Haydale estimated that had revenue met market expectations with a broadly consistent contribution margin, the adjusted EBITDA loss would have been approximately £1.5m, which it said would have been £0.5m favourable to expectations.
SMCC's qualified commercial pipeline has grown by almost 70% since the acquisition completed in January, to approximately £20m, Haydale said.
To address the delivery constraint, Haydale is re-basing SMCC's operating model to be more capital-light, with SMCC focused on origination, Impact Partner relationships, programme management and technology sales, while physical delivery shifts to a new national network of partners.
The company has reached legally binding heads of terms for a joint venture with Quidos Protect, which already forms part of SMCC's delivery supply chain and has delivered approximately £1.6m of SMCC-originated business to date; definitive agreements are to be executed before 31 December.
Quidos Protect's field-management platform supports more than 80,000 installations and service visits annually for national insurers, housing providers and property managers, and the joint venture is expected to go live in October across energy and water efficiency with national coverage from launch.
Haydale said the new structure will lower the annualised revenue required for the group to reach operating breakeven to approximately £10m, down from approximately £17m under the previous model, and it continues to expect the current trading business, excluding SETTF development costs, to reach operating breakeven during the first half of FY27.
The arrangement with Quidos Protect constitutes a related party transaction under AIM Rule 13, as Quidos Protect is controlled by Nicholas Pritchard, a substantial shareholder in Haydale within the last 12 months; the directors, having consulted nominated adviser Cavendish Capital Markets, consider the terms fair and reasonable to shareholders.
"The constraint has been our ability to convert that demand both quickly and efficiently within existing capacity and financial constraints," said Simon Turek, Haydale's chief executive, adding that the delivery network "reduces the turnover required for the Group to reach operating breakeven from approximately £17 million to circa £10 million."
Haydale said development of its Super-Efficient Thermal Transfer Fluid data-centre cooling product, first announced on 15 September, continues to progress well, and it expects to announce its first commercial contracts shortly, with updated FY27 guidance incorporating SETTF to be provided alongside full-year results, expected in February 2027.