Outlook Whilst the Board has recognised from the outset that turning around Pinnacle Technology will take time, as demonstrated by these results, the Board continues to work to stabilise revenues in the business and to position the company to becoming EBITDA positive. Throughout the year the business has been addressing loss making lines of business, reducing costs, and management attention is now increasingly focussed on profitable revenue growth. Although further time and efforts are still required to restructure the Group into the appropriate form for its operations, the opportunities available to Pinnacle Technology and the early signs of progress coming from the initiatives outlined in more detail later in this report underpin the Board's confidence in the future prospects of the Company.
Financial Highlights The results for the year as a whole, though still unsatisfactory, were a material improvement on the previous year. Losses for the year were £1.8m, including £0.8m of additional amortisation and impairment of intangible assets.
Whilst we experienced a 17% decline in group revenues, this reduction arose from re-focussing away from unprofitable business, from the result of increased competition in the IT Security market, and from the previously reported impact of wilful misconduct. Pleasingly, post period end, Pinnacle Technology was awarded costs with respect to the court actions that subsequently arose and these are now being pursued.
At an operational level, we continued to refocus and simplify the business during the year and to exit from unprofitable revenue streams. This is reflected in the reduction in Adjusted EBITDA losses, down 33% in the year to £512k (2013: £769k) although a further £281k of exceptional items were incurred during this process. All of these steps helped move the business towards an EBITDA positive position, which remains a key focus of the management team.
The loss for the year and the associated exceptional items necessitated £858k of cash during the year, resulting in a further fund raise of £416k (after expenses) in February 2014. The group balance sheet continues to show the impact of a number of poor acquisitions made during 2011, where loss making businesses were acquired for relatively small consideration but with significant liabilities. The acquisitions have not delivered the returns anticipated at the time of purchase and have consumed funds to repay the inherited net liabilities of the businesses. The net asset position of the group at year end was £352k and to support the balance sheet and to fund future growth plans we successfully raised £560k before expenses in November 2014.
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