EU Supply dives after annual losses widen

A significant widening of pre-tax losses sent shares in e-procurement software provider EU Supply plummeting on Thursday. For the 12 months ended December 31st, the group generated losses of £3.42m, compared to £0.99m the prior year, with a modest increase in revenue to £1.78m (2012: £1.61m) offset by higher costs of £4.37m (2012: £2.86m). David Cutler, Chairman of the company, said: "Our successful listing on AIM in November 2013 raising GBP5m has enabled the Group to strengthen its balance sheet and accelerate investment in technology and people mainly in sales to take advantage of the growing European market for e-procurement."As EU Member States seek means to reduce costs and seek better control and transparency of procurement processes, the market opportunity thus provided gives us confidence as we look forward to life as a public company."With a team of dedicated and professional staff with clear and strong leadership, the board anticipates strong recurring revenue growth in the current year which will provide the foundation for sustained revenue growth and profitability in the future."The AIM-listed company, which floated in November last year, said the higher costs reflected "significant" investment in its software and operations by way of an increase in staff and and administrative expenses. The initial public offering helped eliminate the company's debt and provided additional working capital to expand its sales force and fund current operations.Looking ahead the group anticipates strong recurring revenue growth in the current year, which it believes will provide the foundation for sustained revenue growth and profitability in the future.The share price declined 17.3% to 30.18p by 13:15.NR