Shares in Dug Technology Ltd (ASX: DUG) are lifting today after the company released a trading update for the financial year to 31 April 2021.
At the time of writing, the Dug Technology share price is up 2.29% trading at $1.115.
The trading results come a day after the company announced it plans to build a high-performance computing (HPC) data campus in Western Australia powered entirely by renewable energy. Let's take a look.
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A mixed trading update
Dug Technology announced that unaudited revenue from 1 January to 30 April this year was US$11.8 million compared to US$13.8 million in the prior corresponding period.
In response to the drop in revenue, the company said that revenue in its service division for the four-month period had been below expectations. However, its high-performance computing (HPC) as-a-service and application software revenues have continued to grow through the period.
On a more positive note, Dug Technology advised that its tender activity had increased due to recovering market conditions. The company achieved US$45.9 million in new work proposals in its services division for the first four months of 2021. This represents an increase of 10% on pre-COVID-19 levels, over the same period in 2019.
Despite its year-to-date revenue coming in below expectations, the company is seeing positive signs for growth moving forward. Dug advised that this elevated level of activity had led to increasing project awards, which were expected to contribute positively to revenue growth in FY22.
About the Dug Technology share price
The Dug Technology share price has slipped 8% year-to-date and is down almost 25% since its ASX debut on 12 August 2020 when it closed at $1.45.
The thing is, Dug Technology isn't alone in its underperformance. Many notable initial public offerings that took place around the same time as Dug have underperformed. ASX shares including MyDeal.com.au Ltd (ASX: MYD), Adore Beauty Group Ltd (ASX: ABY), Youfoodz Holdings Ltd (ASX: YFZ) and Cleanspace Holdings Ltd (ASX: CSX) have all struggled to make headway after listing.
Despite its positive performance today, its shares have a long way to go before breaking even with its debt highs of $1.45 and listing price of $1.35.
