13th Dec 2016 07:59
LONDON (Alliance News) - Mobile commerce and payment service provider Proxama PLC on Tuesday said it expects the Proximity Marketing unit to "dramatically expand" in 2017 and said it will reveal a new, "very significant US partner" to its Digital Payments division shortly.
The company said it expects to deliver revenue of GBP2.6 million in 2016, dropping slightly from GBP2.9 million in 2015. The loss before interest, tax, depreciation and amortisation is expected to be GBP3.5 million, comparable to the GBP5.0 million loss in the prior year.
Revenue from the Proximity Marketing division is expected to have doubled from 2015.
"Revenues in the second half of 2015 were boosted by a substantial 'hurdle' payment from our largest US customer within the Digital Payments division and this will not recur in 2016. At an underlying level the Business has performed well with 16% year on year growth," said Proxama.
Operating costs were 24% lower in the second half compared to the first, the company said, leaving it well placed for next year. Cash at the beginning of December was at GBP700,000.
Proxama said it has not been able to sell off its Digital Payments division before the end of 2016 as expected, pushing the sales process into 2017. Talks are ongoing with two potential buyers and Proxama reiterated its commitment to the sale on Tuesday.
The company said it has had to raise immediate capital to fund its medium-term requirements ahead of that sale, and said it has secured GBP1.8 million after issuing convertible loan notes to Darwin Capital Ltd. A total of 80 notes have been issued at GBP25,000 each, with an issue price of GBP22,500 each. They are unsecured and bear no interest.
They can be converted into shares at a price of 1.24875 pence or 90% of the average price over five days selected by Darwin within the immediate 20 days prior to the conversion. Darwin has also been issued with warrants over a further 75.7 million new shares at 1.24875 pence.
Darwin was also paid a GBP80,000 management fee for setting up the facility.
"The Proximity Marketing Division has made significant progress throughout 2016. We have successfully established the largest proximity marketing beacon network in the UK, with high concentration across London and in many cases, long-term and exclusive contracts with leading media and location owners," the company said.
"We expect proximity marketing and particularly the use of beacons to dramatically expand during 2017 with industry forecasts stating that the proximity marketing market is expected to be worth USD52.00 billion globally by 2022, at a compound annual growth rate of 30% between 2016 and 2022," Proxama added.
The main aim for the division is to get it to a monthly cash breakeven position during 2017.
By Joshua Warner; [email protected]; @JoshAlliance
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