(Alliance News) - Location Sciences Group PLC on Thursday said longer sales cycles will impact revenue in the near term and that the company plans to raise GBP750,000 through a placing as a result.
For the six months to June 30, the company recorded an 94% year-on-year revenue rise to GBP454,872 from GBP234,307. The firm's pretax loss was broadly unchanged at GBP1.1 million.
The revenue gain was offset by a 13% rise in administrative expenses to GBP1.4 million from GBP1.3 million, "reflecting the beginnings of the investment" in the Verify platform and the company's US expansion.
Location Sciences secured 49 brands to its Verify platform, taking the total number of customers of the technology to 58. The firm set a target of adding 50 new brands for the location verification product in 2019.
Location Sciences said: "The company expects longer sales cycles than previously envisaged which will in turn impact the revenues anticipated in the near term. As such the company is announcing a small fundraise today and will seek further investment in due course. In addition to this, the directors have taken measures to reduce the overheads of the business to maximise shareholder value in the long term."
The placing aims to raise a minimum of GBP250,000, but could secure up to GBP750,000.
Through an "accelerated bookbuild", Location Sciences will issue up to 33.3 million new shares to new and existing investors at 2.25 pence apiece. This represents a 17% discount to its 2.80p closing price on Wednesday.
Shares in the software firm were down 14% at 2.42 pence each in London on Thursday morning.
Location Sciences explained: "While the company confirms that following completion of the placing it will have sufficient working capital for its medium term operational requirements, it will require further investment in due course. Should the placing not be successful, the company will seek alternative sources of funding and, if required, implement further cost control measures."
By Eric Cunha; ericcunha@alliancenews.com
Copyright 2019 Alliance News Limited. All Rights Reserved.