It has not been a good start to the new financial year for the shareholders of Adacel Technologies (ASX:ADA) and Superloop (ASX:SLC). Both stocks are falling after announcing heavy profit downgrades.

For Adacel, the previous year’s $10.2m profit will drop to a loss of $1.7m-$1.9m this year. Adacel said it was “extremely disappointed” in the outlook. It blamed cost-over runs for projects, order forecasts not being realised and corporate costs.

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While Superloop still forecasts a profit this year, it has fallen from a range of $13m-$18m to $7-$8m.

Shareholders have sold off both stocks this morning. In the first hour of trade, Adacel was down over 33 per cent while Superloop was down more than 12 per cent

What’s to blame?

Superloop’s explanation was more simple. It said agreements which had been forecast to be effective in Fy19 would now not occur until Fy20 – if at all.

Adacel had three aspects to blame. First, ATM operations in Guadeloupe and Fiji “required a level of complexity not previously experienced” resulting in large costs. Second, Adacel admitted orders were down on last year although not revealing the specific drop.

The figures forced the company to eliminate or defer products it deemed to be “marginally economic”. Finally, the company blamed corporate costs, including severances and legal fees of over $700,000.

But Adacel has promised things will turn around — forecasting a pre-tax profit of $4.1-$4.6m for FY20. As the company noted, that is $6m better than this year but over $5m worse than 2018.

The announcement came after a three-month strategic review where the company identified areas to improve results including “belt-tightening” and completing projects that incurred cost blow outs.

Adacel chairman Michael McConnell took the opportunity to make a new (financial years’) resolution that the company would turn around. “FY20 represents a year in which Adacel will focus on its core products and services and the implementation of a set of management disciples to drive operational improvements which together form the foundation for future growth,” he said.

Superloop’s board made no promises about profitability this financial year, but reminded shareholders it had a strong balance sheet following an unnamed divestment.

In other ASX tech news today:

The shareholders of Xref (ASX:XRE) have had a good start to the financial year. In the last quarter alone, $3.6m in sales and $2m in credit usage had occurred. Xref also announced as new clients the Melbourne Cricket Club, the Ritz London and New Zealand’s foreign affairs industry. It also announced the purchase of ID verification platform RapidID – which has clients including Uber and EasyPay. Xref will pay $1.5m for the platform – $600,000 in shares and the rest in Xref shares. CEO Lee-Martin Seymour told shareholders, “This acquisition changes the Xref narrative. Today we become a global verification service.”

Adveritas (ASX:AV1) won a $300,000 contract with Google & Tencent-backed Indonesian unicorn Go-JEK to use its TrafficGuard software. Go-JEK are an Indonesian “everything” app offering services from ridesharing to food delivery at the touch of a button. They process over 100 million transactions per month and have 25 million monthly users. Adveritas called this “a major endorsement” of TrafficGuard and said this alone boosted annual recurring revenue by 33 per cent.

Speaking of Indonesian contract wins, Linius Technologies (ASX:LNU) entered into a deal with SportsHero (ASX:SHO) to use Linius technology in SportsHero apps including the Football Association of Indonesia’s official mobile app. SportsHero and Linius will be delivering a platform for sports fans to customise content for themselves. Indonesia has the largest digital community in the ASEAN region with 130 million social media users and 177 million mobile users.

UUV Aquabotix (ASX:UUV) predicted recent maritime attacks could be an opportunity for the company. While in the short term, maritime companies will increase guards on their ships, UUV predicted in the long term companies would flock to its products. UUV boasted its SwarmDiver EDGE could visually deter and alert to threats in ways a human security officer could not. “Aquabotix is ready to assist and is working on assisting qualified customers with their needs,” said CEO Whitney Million.

Finally, Atomos (ASX:AMS) completed a $7.5m capital raise this morning. Among the shares offered for sale were 27 million shares that had been escrowed for six months.