30th Sep 2019 10:51
(Alliance News) - Mporium Group PLC on Monday reported a significantly widened interim loss due to the firm's restructuring.
Separately, Mporium announced it will be acquiring Click Laboratories Ltd and We Breathe Media Ltd for a maximum of GBP5.5 million, using a share issue and placing to help pay.
Shares in the data-driven marketing firm were down 40% in London in mid-morning trade at 0.50 pence each.
Mporium said the acquisition will make a "material positive contribution" in the current financial year. The marketing company said the deal "accelerates its pathway to becoming net cash generative".
The initial consideration for the deal will be GBP500,000 in cash and the issue of 400.0 million shares, worth GBP2 million, based on a share price of 0.50p per share. Up to GBP3 million in additional cash consideration then will be delivered in eight tranches over the next 24 months based on net profit targets.
The cash portion of the initial consideration, and the subsequent running costs, will be paid for by way a share placing, with which Mporium intends to raise GBP1.3 million. The placing price per share is set at the same 0.50p.
As part of the placing, warrants will also be issued, to be exercised before December 2021. The warrants will have a subscription price of 1.5p per share.
Mprorium expects to issue 650.0 million new shares as part of the acquisition and placing.
"This complementary potential acquisition is an exciting and transformative opportunity, and one which offers operational and financial benefits. By incorporating the highly experienced team at Click Labs we believe we can significantly strengthen our market positioning in this area," said Chief Executive Tom Smith.
Turning to the marketing firm's interim results, Mproium posted a pretax loss of GBP13.7 million, significantly wider than the GBP3.1 million recorded a year before. The company blamed its restructuring for the loss.
"Mporium has recently undergone a major restructuring in response to the significant market challenges faced by the agency division. These included a high cost base at a time of decreasing revenue, due to some brands bringing marketing capabilities in-house, which meant the business model became unsustainable," the company explained.
Revenue rose sharply to GBP18.5 million from GBP552,810 the year before.
The growth in revenue was attributed to the "lead generation" from the payment protection insurance claims deadline of August in the UK. Mporium said this revenue will not continue.
Smith added: "The group's leaner business model and focus on performance marketing and technology licensing has opened up the opportunity for future scaling of the business within specific sectors including sports streaming, sports betting, and consumer-regulation in the post-PPI market."
He continued: "The group now has a strong, commercially driven team and is focused on a strategy for sustained growth. This provides the board with confidence as we look to the remainder of the year and beyond."
By Paul McGowan; [email protected]
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