At first glance today's trading update by service exchange platform Blur (BLUR:AIM) seems as upbeat as ever. It flags 'significant milestones' already hit in the early days of 2014, such as number of expert service providers passing 35,000, total value of projects submitted to the exchange whizzing beyond $150 million – $100 million of which submitted since September 2013. All in all, Blur claims nearly 40,000 businesses are using its platform from more than 140 countries to buy and sell an increasing array of services, still mainly design and marketing but also legal, accounting and others.
Remember, this is after unveiling highly impressive key performance indicators (KPIs) for the last quarter of 2013 just two weeks ago. So readers might reasonably wonder why the shares have fallen 4% today to 760p?
That's down to these couple of lines in the statement: '...larger projects can be longer in duration and more sophisticated in delivery with multiple participants and geographies... sizeable projects in progress … have more complex delivery, timing and revenue recognition parameters.'
Anthony Miller, the highly respected IT analyst at consultancy TechMarketViews raises the point that this could be construed as a 'veiled profits warning.'
That's a bit hard to tally given Blur has not yet made a profit but a revenue warning, perhaps.
Clearly investors are thinking this through, judging by today's share price reaction. But that looks rather harsh considering that the company also states that the 'trend towards higher value projects with staged delivery cycles provides longer term visibility of Exchange use and uptake... will provide more material benefits through 2014.'
Today's share price slide looks more an excuse by investors to crystallise some of the staggering 800%-plus profits made since the company's IPO just 15-months ago at 82p. Look at it another way, nevermind 15-months, the shares have shot-up 75% since Shares published a positive story in the Christmas Eve edition of the magazine. That's barely a month ago.
Resisting the temptation to top-slice such a rocket-fuelled run would take an iron-cast will on the part of an ordinary investor, especially when many could potentially cover their initial outlay and effectively keep a free ride on Blur's ability to capitalise on digital business in the future. It's hard to argue with that logic.