LONDON (Alliance News) - Coms PLC Friday reported a significant rise in revenue during the first half following its acquisitions last year, but its pretax loss widened as it continues to restructure and experienced higher costs.
Coms shares were down 13% to 3.22 pence per share Friday morning.
The company reported a wider pretax loss for the first half ended July 31, totalling GBP417,469, nearly quadruple the GBP118,645 reported a year earlier. This is mainly due to one of its acquisitions from last year, CloudXL, running at a loss for the first two months of the year and Coms having to pay duplicate running costs during its restructuring.
The wider loss is also a result of higher cost of sales due to the significant rise in revenue, totalling GBP17.8 million during the first half, compared to GBP1.5 million a year earlier. Administrative expenses also increased to GBP5.8 million from GBP1.2 million due to the acquisitions last year.
Revenue for the first half increased significantly to GBP23.1 million compared to GBP2.5 million in the comparable period in 2013. The rise is due to acquisitions being integrated into the business and organic growth, Coms said in a statement.
The company reported a low cash position of GBP974,256 at July 31.
"The acquisitions of CloudXL, which now trades as Coms direct channel, and Smarter Mobile UK, which now trades as part of Coms Mobile, were of strategic importance. They, along with the numerous acquisitions the company made in the prior financial year, have enabled Coms to offer the full range of telecoms services - encompassing infrastructure and information and communications technology management, through Redstone, wholesale and retail voice over internet protocol telecoms services, through CloudXL, and Mobile Telecoms services through Coms Mobile - to our growing client base," said Chief Executive David Breith.
The company continues to look at further acquisitions as its plan to grow further to help consolidate the markets in which it is currently operating. Coms will organically grow via upselling and cross-selling to existing customers and offering new products and services, which are expected to be released during the next six months, it said in a statement.
"As per our earlier announcements we have been successful in securing a number of new contracts and our sales pipeline has continued to grow which, together, give me confidence that we will achieve our revenue forecast for the full year. In saying this, the gross profit on new business in the infrastructure business has tended to be lower than we had originally expected but we are working on improving our margin," said Breith.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
Copyright 2014 Alliance News Limited. All Rights Reserved.
