Bidstack slumps as loss widens on spiraling costs

(Sharecast News) - Bidstack's shares stumbled on Thursday after it reported a wider loss as cost increases outweighed a jump in revenue.The native in-game advertising group recorded a loss before tax of £3.3m for 2018, a jump in loss from the £0.5m achieved the year before, as administrative expenses leapt by 214% to £1.3m and cost of sales jumped by 137% to £0.2m.Increased losses were also driven by the AIM traded company recording transaction costs of £0.7m and share based payments of £1.4m related to the acquisition of Bidstack Limited by way of a reverse takeover.Meanwhile, staff costs increased to £0.7m from £33,833 as the company increased wages and hired more employees in a bid to strengthen its sales and technical development teams, which on the other hand did see revenue increase from £10,034 to £0.3m.Donald Stewart, chairman of Bidstack, said: "The team has made great progress in the development of the Bidstack platform since completion of the RTO. These advances coupled with the high levels of interest in Bidstack's business model we are experiencing from games publishers, developers and other leading technology businesses all support the directors' belief that we have a significant first mover advantage in the provision of dynamic native in-game advertising and that the business will generate highly significant amounts of advertising traffic."Cash and cash equivalents stood at £2.1m at the end of the year, which was far higher than the £1,661 on hand at the same point the year before, after Bidstack raised £3.5m via an over-subscribed placing."In the short term the board intends to prioritise investment in technical developments which will place Bidstack in the best possible position to operate at significantly increased scale. We believe this strategy will result in the business being well placed to meet market expectations for 2019 and will facilitate extensive growth in 2020. As a fast-growing business, we expect that revenues in 2019 will be significantly second half weighted with perhaps a more marked split than previously anticipated," said Stewart.Bidstack's shares were down 8.39% at 13.10p at 1206 BST.