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Well at least there is a bit more detail this time… Wish they would share more on the numbers.
The takeaway from this RNS for me is that the company would be going bust next year without it. They are hoping to sort out the cash burn problem by breaking even in 2024. That's how I see it - any differing views?
I don’t think a ‘cash burn’ is at all expected for a young business.
A break even point early 2024 is a positive!
A raise to further the business slightly lower than the current sp is also not unusual, especially consider the current ‘risk off’ sentiment.
Customer and ARR growth are impressive!
:-)
#unexpected sorry
Fair points there NorthernBoy. Companies usually list on AIM to raise cash after all. I must admit, I didn't have time to check this morning, but I was trying to remember if the 2024 date was a change, or just a reiteration of previous BOD expectations.
My post wasn't intended to be derampy, though perhaps it looks a little negative. I'm still smarting a little at buying in at the top. 19% dilution (my calculation of the result with the new shares) isn't too horrendous, as long as that's not repeated.
some cash burn is clearly expected, however, this is the 3rd placing in 10 months (14p, 8p and now 6p) so there is clearly something wrong here .
They massively increased marketing spend yet the revenue increase in the last results was less than the extra expenditure. Yes it's good that new contracts are now slowly coming in but each contract is quite a low value (between £25k and £50k p.a. i think) so they need many more to get to breakeven - i think the loss was £6m last year.
This placing is clearly to keep the lights on so i'm not convinced they won't need more money in 2023 as the cost base is now so high. Happy to be proved wrong
In hindsight it would have been better to have raised once around that 14p level and have raised a sufficient sum - three raises leaves the market concerned that costs are out of control...
We have to take the company on trust that this third raise will take them through to profitability, but difficult to trust the board.
The positives are customer growth and that ARR number growing quickly... That is impressive and needs to continue apace.
Target has to be to get ARR through $10m soonest.
exactly shandypants. i dont know why everyone is justifying the placings. as u sau the placing price has been getting lower and lower and lower. Really does feel like they are burning up cash and they havent even raised that much at 6p.
The optimist in me would hope the fact they are raising less at 6p than at 14p indicates the breakeven 2024 target is within sight and won't need as much to reach a positive cashflow, I don't think they've ever indicated a breakeven target in RNS before, a turnover target yes but not breakeven.
However, the realist is saying sell my holding now to pre-empt the next raise at 4p next year!