18th Mar 2015 08:28
LONDON (Alliance News) - Shares in Synety Group PLC are trading down by a third shortly after the market open Wednesday, after it raised funds in a discounted placing and posted a widened pretax loss for 2014 as it continued to ramp up investments.
The cloud-based software company said it conditionally has raised GBP2.8 million through the placing of 3.13 million shares at 90 pence, and plans to raise up to a further GBP750,000 through the open offer of 834,028 shares at the same price.
Shares in Synety are down 33% at 92.30 pence early Wednesday morning.
The company plans to use the proceeds from the share issuance to bolster its sales, presales and marketing team in the UK and to fund product development, as well as bolstering its US operations.
The company posted a pretax loss of GBP5.5 million for 2014, widened from GBP3.7 million in 2013, as a rise in revenue to GBP1.6 million from GBP547,000 was offset by higher operating costs resulting from the company's investment in its operations and launch in the US.
Synety said recurring revenue had continued to build throughout 2014, although not as quickly as it had originally estimated, due to larger and more complex customers. Annualised recurring revenue increased to GBP3.02 million from GBP870,000 a year before.
Recurring revenue per user rose to GBP30.48 from GBP24.10 at the end of 2013.
The company expressed optimism for Synety's prospects in 2015, saying that whilst it was disappointed progress had been slower than it had originally anticipated, it was encouraged by its key performance indicators and believes there is "significant opportunity" in its marketplace.
The placing is subject to shareholder approval of resolutions at a general meeting April 7. If these resolutions are passed, the company said it also will appoint Peter Simmonds as a non-executive director.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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