It's nearly two and a half years since cloud hosted comms and enterprise solutions business Outsourcery joined AIM amid much fanfare. Founded and led by Dragon's Den'er Piers Linney, this was a small UK tech business that was going to go places fast, and it talked institutions into handed over £13 million at its IPO, priced at 110p per share.

A swathe of strategic partnerships quickly followed, and so did the cash calls, as losses mounted and growth remained elusive.


Piers Linney

Nearly 30 months later and nothing much has changed, except the share price and expectations. Its near £34 million market cap at IPO has shrunk disastrously and, at today's 15.5p (after another 3% decline), the company is worth just £7.3 million.

Today's interims are frustratingly, meh! Sure, revenues up 20% seems decent, yet that's just 5% progress versus the second half of 2014, there's a bit of gross margin growth to 49.2%, which given the largely flat operating costs means EBITDA losses were cut by 26%.


Yet this remains a business that is still burning through relatively large chunks of cash, £1.3 million nearly in the six months to 30 June. And recurring revenues are flatlining at just 17% of the £4.1 million total.

'Outsourcery will this year do barely a third of the £24.4 million revenues forecast prior to the IPO,' points out Megabuyte's Philip Carse.

Cue another swathe of forecast cuts, Investec has slashed its full year revenues estimate from £ 11.1 million to £8.5 million, basically confirming little improvement in the second half. At the same time the investment bank has also hiked 2016 EBITDA losses from £1.5 million to £4 million.

Needing to be bailed out by an emergency £4 million loan from Vodafone (VOD) in July, and with substantial EBITDA losses still on the horizon, expect Outsourcery to have the cap out again soon.


Issue Date: 29 Sep 2015