LONDON (Alliance News) - Shares in virtual reality music platform EVR Holdings PLC plunged Thursday after the company reported a significantly widened annual loss.
Shares in EVR were down 19% in midday trading at 3.02 pence each.
For 2018, EVR - which operates the MelodyVR platform - recorded a pretax loss of GBP11.4 million, almost double the GBP6.2 million loss reported in 2017.
EVR generated GBP1.2 million in revenue in 2018 compared to zero in 2017 but the company's cost of sales was GBP1.4 million.
The revenue loss was attributed to the deduction of content creation costs and amounts due to rights holders - which includes commissions and revenue share arrangements.
EVR's administrative expenses increased to GBP11.3 million from GBP6.2 million the year before.
The company said the loss could be attributed to its increased investment in "people and operating capabilities".
At the end of 2018, EVR had GBP19 million in cash following the completion of a GBP20 million equity raising.
During 2018, the company had its inaugural live stream event, with Liam Payne, formerly of boy band One Direction. The event was broadcast from London to 26 countries on MelodyVR and Facebook. To date, the content achieved "more than" 127,000 views.
"Where others have scaled operations in anticipation of mass market appeal, our measured expansion has allowed us to conserve valuable cash resources, preserve agility and capitalise on our first mover advantage in this young and embryonic industry. Ultimately the success of our model will depend on our ability to scale," said Executive Chair Anthony Matchett.
"We are reassured by the experiences of those who have already experienced our immersive content and are confident that given the right access, awareness and availability of our content, user numbers and the quality of engagement will deliver profitable growth. We will, therefore, continue to invest in key marketing and product initiatives, to accelerate reach and believe that at scale we will benefit from substantial revenues and improved margins."