Outsourcery shares fall more than 35% after cash warning
Outsourcery, the Manchester-based cloud services company, has warned that it needs to raise emergency cash after revenue growth was affected by "partner product launch delays" outside its control.
In a trading update, the company founded by former Dragon's Den judge Piers Linney said gross cash had fallen to £0.9m and that it was looking into the fundraising, restructuring and the disposal of non-strategic business assets in order to generate some short-term working capital.
Although group revenues climbed by 9% to £8.1m, the news sent the company's shares tumbling today by over 35% to 6.38p.
The company said: "Whilst the full-year results and current trading are in line with the board's expectations, this view factors in that revenue growth from the company's strategic partners has been impacted by further partner product launch delays outside of Outsourcery's control.
"The company will require further funding for short-term working capital purposes and is therefore investigating alternative solutions to its short term-cash needs including fundraising, restructuring and the disposal of non-strategic business assets.
"The company is in an ongoing dialogue with its principal secured lender to agree certain consents required to allow for an appropriate solution to be implemented, which is expected to provide working capital for the ongoing unified communications business."
In September, UKFast owner Lawrence Jones invested more than £1m in taking a 10.5% stake in the company.
And last summer, Outsourcery announced it had agreed a £4m loan with Vodafone Group.