27th Apr 2016 10:07
LONDON (Alliance News) - Blur Group PLC Wednesday reported a narrowed pretax loss, despite seeing revenue fall as part of its shift in strategy, and reiterated its commitment to the new strategy, saying it had made further progress in the first quarter of 2016.
The company, which operates a services platform and marketplace, has shifted towards what it calls an "enterprise-focused" strategy, meaning it is only focused on businesses with 50 or more employees. As part of this process it removed access to all contingent projects on its marketplace, and ceased direct marketing activities aimed at smaller businesses.
For 2015 the company reported a pretax loss of USD10.5 million, narrowed from a pretax loss of USD11.0 million in 2014, as a fall in revenue to USD2.7 million from USD4.7 million was offset by lower administrative costs.
Blur attributed the fall in revenue to longer sales cycles in the more mature enterprise market, whilst revenue from one-off small-to-medium-enterprise projects dropped off more quickly. Additionally, the company recognised significantly less income from cancellation fees.
The company said it had continued with its strategic focus on securing enterprise customers in the first quarter of 2016, and said that it had seen an increase in the proportion of enterprise projects 'pitching on' and 'kicked off' on its marketplace.
Elsewhere it continued to improve its cost base, reducing operating costs by 25% compared to the fourth quarter of 2015.
"Now that our Enterprise transition is complete, I remain convinced that our Enterprise strategy is the right one for blur and its stakeholders. Acquiring repeating, loyal accounts is key to our future success. By maintaining high levels of delivery and focusing on helping our customers buy business services better, blur will continue on its path to profitability," said Chief Executive Officer Philip Letts in a statement.
"We recognized that our Enterprise strategy would lead to an extension of the sales cycle. The decentralized nature of indirect procurement in a large Enterprise, combined with the time that can be taken for an Enterprise to identify and quantify their indirect spend problem, means that we expect the cycle between initial meetings and the placement of higher volumes of project spend with blur to extend over several quarters. However, our Enterprise-focus continues to drive efficiencies which will lead to further improvements in our cash flows," Letts added.
Shares in Blur were down 22% at 1070 pence Wednesday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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