LONDON (Alliance News) - Cloud-based computer system provider CloudCall Group PLC on Friday said cost reductions and delayed investments in the first half of its financial year constrained profit, as it announced two proposed placings to raise up to GBP3.8 million.
CloudCall said its revenue grew 62% to GBP2.3 million for the six months ended June 30 when compared with a year earlier, though noted that this was a "little weaker" than anticipated. This was because of the "significant amount of work that has gone into the product to deepen its functionality to better suit the needs of larger customers and more demanding customer relationship management partners", CloudCall said.
During the period, recurring revenue rose 24% higher than the second half of 2015, and now totals 84% of total revenue.
However, increased administrative expenses meant its pretax loss widened for the first half to GBP1.8 million from GBP1.7 million a year earlier.
The company said its average new users per month declined to 244 from 363 a year earlier, due to the impact of resource constraints, but said it was undertaking two placings to raise funds which will "substantially remove the working capital constraints which have hitherto restricted our rate of customer acquisition growth".
CloudCall said it has conditionally raised GBP2.1 million through a firm placing of 3.7 million shares at 57.5 pence per share. A further GBP1.6 million has been conditionally raised by placing 2.9 million shares at 57.5p per share, though the second tranche is subject to clearance by the UK HM Revenue and Customers.
Shares in CloudCall closed up 8.1% at 60.0 pence per share on Friday.
Seven directors have agreed to participate in the placing, including the entire executive team.
Mark Seemann, the president and co-founder of the business, has subscribed for 17.391 shares and will hold a total of 1.4 million shares in the company. Chief Executive Simon Cleaver plans to buy 17,391 sharesto hold a total of 795,660 shares. Chief Financial Officer Paul Williams plans to increase his stake by buying 24,347 shares so he can have a holding of 110,304 shares.
Non-Executive Chairman Peter Simmonds will buy 40,000 shares to hold 178,055 shares. Non-Executive Director Sophie Tomkins will subscribe for 17,391 shares to hold 39,987 shares, and fellow Non-Executive Graham Ward will hold 355,981 shares when he purchases 17,391 shares.
Andrew Jones, the chief operating officer for the company's US operations, also plans to buy 17,391 shares to push his holding up to 70,688 shares.
"While the board is pleased with the progress being made in all areas of the business, within the confines of our resource restraints, what we are most excited about are the accelerated growth opportunities that will now be available to us as we leverage the funds from the placing and upscale our resource, particularly in the US, as we focus on key channel partners and larger customers," said Chief Executive Simon Cleaver.
By Hannah Boland; hannahboland@alliancenews.com; @Hannaheboland
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