Plexure Group narrows its first-half net loss

Chief executive Craig Herbison
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Plexure Group, the mobile voucher firm formerly called VMob, reported a narrower net loss in the first half as it lifted revenue and continued to streamline the business. The result was ahead of guidance.

The Auckland-based company said its net loss was $195,000, or 0.26 cents per share, in the six months to Sept 30, versus a loss of $3.7 million, or 4 cents, in the prior year. Total revenue lifted to $5.4 million from $3.6 million, while operating expenses fell to $5.6 million from $7.3 million.

The result is slightly ahead of guidance it gave in September when it said its net loss after tax was expected to be $400,000.

"Our two major cost categories are wages and salaries and our platform hosting costs, both of which have reduced," the company said in its half-year report. Salaries have reduced due to downsizing, particularly in its overseas operations where costs have decreased by 59.2 percent or $600,000, it said. "We have also reduced our New Zealand operations and again will increase this over time but only where the customer demand justifies the expenditure," it said.

In June it said it would cut nine permanent jobs and six contract staff from its 55 strong workforce from August in a restructure as the digital ad firm's product development stage ends and it sees growing demand for professional services.

Its wage and staff costs dropped to $1.9 million in the first half from $2.8 million a year earlier.

During the first six months of the year, the company raised $1.9 million of new capital and is currently cashflow positive with $2.4 million in cash and cash equivalents. "At this stage we do not foresee the need to raise additional capital, however as opportunities present themselves we may revisit this," it said.

The shares last traded at 11 cents and are down 50 percent over the past year.


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Well done. Accounts look a lot better now.
$1.8m from license revenue is down from $2m at the same time last year, but they have scrounged and earned $1m extra in "deployment and integration revenue and $760k in "consulting revenue". These don't sound like recurring items, but cash is good.

The team has done what they needed to stop the outflow of cash. The next step is to prove that there is some kind of recurring sales model in there.

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I think its safe to say Plexure are operating in a difficult market with a model that's not up to scratch, tainted by bad mismanagement from the outset (thanks to the ex-CEO). They will never be a viable business which is unfortunate but in order for businesses to succeed we must expect an equal amount to fail. Its just a shame this failure wasn't so much market led but driven by shameful leadership.

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If you cannot get a company to be anywhere near profit with clients like McDonalds and Ikea then I am afraid ladies and gentlemen you will not get this enterprise up and running. Ever.

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