LONDON (Alliance News) - Forbidden Technologies PLC Monday expressed confidence that it would grow in the second half of the year, even as "significant investment" in its first half to end-June widened its pretax loss for the period.
Forbidden develops and operates cloud video-editing platform ForScene.
The company posted a widened pretax loss of GBP1.2 million for the six months ended June 30, compared with a GBP189,618 loss a year earlier, as revenue declined to GBP348,077 from GBP401,278, and administrative expenses nearly tripled as it upped its headcount and set up its new US subsidiary.
Some GBP184,000 was spent on setting up and staffing the US subsidiary. It will continue to make investments in the second half leading up until the International Broadcasting Convention in September.
Whilst the shift towards cloud-based editing in the entertainment market has picked up, executives have reduced spending as they choose which products to go forward with. Forbidden attributed the decline in its revenue to this trend.
Later start dates for some major broadcast series and slow take up of new opportunities in sports also contributed to the revenue decline.
The company noted that whilst revenue was down, it considers the reasons to be "short term", and reiterated confidence in its strategy.
It said its pipeline in North America is impressive, and initial sales have been made. It expects significant growth in the second half and continuing into 2015.
The main investment it is making in its technology is expanding the use of the system, particularly as a media asset manager.
"At the moment we're an editing system and we're seen as an editing system, but the platform we have covers far more, potentially the whole range of broadcast post production," Chief Executive Stephen Streater told Alliance News.
"What we're doing is introducing an interface for the media asset manager that will open up a lot of our platform to customers," Streater said. This will be launched at the International Broadcasting Convention in September. The company also cited a move towards mobile, and will also release a system that works with Apple iPad tablets at IBC.
Additionally, it made "rapid progress" on designing and developing its planned entry into the consumer market, under the brand name "eva". Forbidden has published a web page for the product Monday, which allows visitors to take part in alpha testing of the product.
"We're trying to use our technology to build a consumer proposition, our objective is to build an app with millions of monthly active users that utilises core capabilities and that can attract large scale investors," Consumer Products director Aziz Musa told Alliance News. Musa explained that this interest is not necessarily acquisition interest, but could also be partnerships.
"We're really focused on creating an addictive experience," Musa said.
It expects to have is first version launched by the end of the year, and will launch multiple versions before then, with alpha testing and beta testing to test things that they cannot check in prototypes.
A specific pricing model has not been set for the product at this stage as it is focused on building a user base. The company isn't expecting the product to contribute during this year, but said there may be some contribution next year.
By the time the 1.0 version of the product is launched, it will have an idea of what an appropriate revenue model will be, Musa said. However, applying a revenue model too soon could be intimidating for users, Musa added, so it may be a while before its implemented as it bolsters user numbers.
"The industry shift towards cloud-based workflows continues and, with a number of new staff appointments, growing momentum in North America, and the development of an exciting new consumer offering well underway, we remain confident in Forbidden's ability to grow in the second half and beyond," said Chief Executive Stephen Streater in a statement.
Shares in Forbidden were trading down 13% at 17.44 pence Monday afternoon.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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Forbidden (FBT)