TIDMBLUR
RNS Number : 4560F
Blur Group PLC
28 July 2016
blur Group plc
("blur Group", the "Group" or the "Company")
Q2 2016 Quarterly Business Update
blur Group plc (AIM:BLUR), the market-leading Enterprise
Services Platform & Marketplace, today releases key metrics for
Q2 2016, a period of continued progress across the Group's
Enterprise customers reflected in EBITDA improvement, gross profit
generation and further reductions in cash burn and operating
costs.
Q2 2016 highlights:
-- blur's Enterprise strategy continues to drive improvements to
EBITDA, gross profit, costs and cash
-- Higher margin revenues increased by 75% over Q1, driving a
positive gross profit in the period
-- Third consecutive quarter of improved underlying cash burn -
down by 28% to $1.1 million in Q2 2016 from $1.5 million in Q1 2016
(excluding Foreign Exchange movements and Q1's R&D tax credit
receipt of $0.5 million)
-- Cash at the end of Q2 2016, including unrealised foreign
exchange movements, was $4.3 million
-- Operating costs down 22% compared to Q1 2016 as the
Enterprise strategy continues to drive further operational
efficiencies
-- Reduction in project numbers largely offset by increases in
average project kick off values resulting in broadly flat total
value of kicked off projects comparing Q2 to Q1. Variations of
project volumes and values are as typically seen in early stages of
Enterprise relationships
-- H1 2016 EBITDA in line with management expectations
ALL PROJECTS Q2 2016 Q1 2016 CHANGE
--------------- --------- --------- --------
No. No. %
--------------- --------- --------- --------
Pitching On 73 97 -24.7
--------------- --------- --------- --------
Kicked Off 73 101 -27.7
--------------- --------- --------- --------
Completed 54 80 -32.5
--------------- --------- --------- --------
ENTERPRISE PROJECTS ONLY** Q2 2016 Q1 2016 CHANGE
----------------------------- --------- --------- --------
No. No. %
----------------------------- --------- --------- --------
Pitching On 30 74 -59.5
----------------------------- --------- --------- --------
Kicked Off 30 76 -60.5
----------------------------- --------- --------- --------
Completed 38 42 -9.5
----------------------------- --------- --------- --------
**blur defines the Enterprise as a business with 50 or more
employees
During Q2 2016, the Group continued with its strategic focus on
securing high-quality, higher margin Enterprise customers, with a
propensity for repeat business. blur continues to work closely
with, among others, the following three Enterprise customers in
Q2:
UK listed enterprise, aerospace engineering; blur is working
with a large corporation on a pilot program that is planned for Q3
and Q4 2016. The pilot process will involve on-boarding a single
division's indirect spend supplier base to blur's platform.
UK listed enterprise, multi-platform media; blur is working with
a corporation on an initial pilot due to launch in Q3 2016. The
pilot is focused on improving the effectiveness of the
corporation's marketing spend.
UK listed enterprise, oil and gas; blur has been working with
this large corporation for several quarters, with a pilot in
process. blur aims to become the strategic supplier for indirect
business services spend, initially focussed on the marketing
function.
Financial update
blur's focus on larger, Enterprise accounts continues to drive
improvements to EBITDA, gross profit, costs and cash.
The Group's higher margin revenues grew by 75% in Q2, over Q1.
The three elements of the Group's higher margin revenues, Premium
Services, Access Fees and Subscriptions, each increased, driving a
gross profit for the quarter.
The Group's cash balance at the end of Q2 2016 totalled $4.3
million compared to $5.8 million at the end of Q1 2016.
As the Group is in the early phases of relationships with
Enterprises, blur has seen variations in the volume and value of
projects placed. In this period, the reduction in the numbers of
projects kicked off and pitched on in Q2 was largely offset by an
increase in the average project value meaning that the total value
of kicked off projects fell by just 2%, compared to Q1 2016.
Cash collections performed well in Q2, reflecting the higher
quality revenue generated from blur's Enterprise customers.
blur's reported cash balance has been impacted by $0.7 million
of unrealised exchange losses in the last two quarters and $0.4
million of unrealised exchange losses in Q2 2016, as the valuation
of blur's sterling denominated cash balances were affected by the
Brexit-driven decline in the GBP:USD exchange rate at the end of
June.
Excluding these exchange movements, and Q1's R&D tax credit
receipt of $0.5 million, the cash burn for Q2 2016 was $1.1
million, 28% lower than Q1 2016.
blur's operating efficiency also continued to improve, driving a
reduction in operating expenses of 22% in Q2, compared to Q1 2016
and by 41% compared to Q4 2015.
Philip Letts, blur Group CEO, commented:
"Q2 2016 has seen the Group further develop its Enterprise
pipeline. We continue to work closely with several larger
Enterprises, demonstrating that our unique end-to-end solution
drives down their indirect business services spend.
"The current macro-economic uncertainty means that cash
optimisation, driven by better cost control, is moving to the top
of the corporate agenda. This was highlighted by Deloitte's recent
Q2 2016 CFO survey, with reducing costs and increasing cash flow
being the top two balance sheet priorities for the first time in
more than a year. Whilst we don't expect these trends to have an
immediate impact on blur's revenues, over time we do expect an
increasing number of large Enterprises to prioritise reduction of
their indirect spend.
"For several quarters, our strategy has been to focus on these
large Enterprise customers. By doing this, blur has improved the
quality of its revenues throughout the first half of 2016, leading
to significant quarter on quarter improvements to EBITDA, gross
profit, costs, collections and cash burn.
"While blur saw a reduction in project numbers in the quarter,
the early phases of the Group's relationships with larger
corporates is characterised by longer sales cycles, together with
wider variations in the volumes and values of projects. In Q2 we
saw an increase in the average value of projects kicked off,
meaning our total value of kicked off projects was broadly
unchanged from Q1.
"Engaging with high quality, higher margin, repeating Enterprise
accounts remains blur's strategic focus and we are committed to
becoming the indirect business services spend platform of choice
for those customers. Achieving wider roll outs of our platform in
these larger organisations is key to blur's path to sustainable
profitability."
This announcement contains inside information.
For further information, please contact:
blur Group plc investors@blurgroup.com
Tim Allen Tel: +44 (0) 1392 927618
Shaun Dobson/Jen Boorer N+1 Singer
Tel: +44 (0) 20 7496 3000
Alistair de Kare-Silver Yellow Jersey PR
Tel: +44 (0) 7825 916715
About blur Group plc at blurgroup.com
Since 2010, blur Group has been helping enterprises worldwide
eliminate waste and inefficiency in their indirect procurement
process through its market leading Enterprise Services Platform
& Marketplace. To date over 65,000 businesses, including
companies like, Tesco, Danone, Trinity Mirror, and PwC, have
adopted blur's platform to either buy or sell services online
submitting over $500m of services requirements to blur Group's
platform.
blur Group is a public company listed on the London Stock
Exchange's AIM market (BLUR) and is headquartered in the UK with
regional sales offices in the US and Europe.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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