LONDON (Alliance News) - Fitbug Holdings PLC on Monday said it is considering raising equity in the near future and that talks are underway with its lenders regarding the company's debt pile, as the company reported a wider loss in 2015 as revenue dropped and costs rose.
The wearable health tracker maker reported a GBP6.5 million pretax loss in 2015 compared to the GBP3.8 million loss in 2014, as revenue almost halved to GBP1.3 million from GBP2.3 million.
That pushed the company to a gross loss of GBP124,000 from a GBP868,000 profit the year before, and Fitbug also said administrative costs rose to GBP5.2 million from GBP3.6 million whilst exceptional expenses increased to GBP1.2 million from GBP742,000.
Fitbug has implemented a turnaround strategy to focus on the service and software opportunity within the business-to-business market after the strategy focused on direct consumers "failed to deliver results", it said. Numerous cost initiatives have also been implemented aimed at delivering a 30% reduction in the cost base during 2016.
"This robust remedial action meant that the company closed 2015 as a very different entity from the one that began it, and I am pleased to report that the group has experienced an encouraging start to trading in 2016, with first quarter sales in the corporate wellness sector significantly increased over like for like sales in the same period of 2015," said Chief Executive Anna Gudmundson, who joined the company late in 2015.
"While sales of wearable trackers will remain a significant revenue stream for some time to come, our vision is to reposition the company from the market's current perception of a supplier of cost effective wearables, into a software as a service provider in the health and wellness technology space," she added.
Fitbug said it is currently considering a potential equity fundraise as it would be the " most expedient and efficient method" to raise the funds that the company requires. Talks with potential investors is continuing, but any share issuance would need approval from shareholders.
The company said it has agreed to take a further loan from NW1 Investments worth GBP121,000. That will be repayable at the end of July 2017, in line with its other loans from NW1 and will carry an interest rate that is 2.5% per annum above the base lending rate of the Bank of England, it said.
NW1, alongside Kifin Ltd, are also some of the potential investors which may take part in the equity fundraise and concerning the company's existing debt. This stood at GBP9.3 million at the end of 2015, up from GBP8.0 million at the end of 2014.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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