Blur Group warns shareholders as it seeks urgent funding

Online B2B marketplace provider Blur Group updated the market on Friday, confirming that its rate of cash burn had stayed “broadly constant” with the $0.9m-$1m seen in the final two quarters of 2016.

The AIM-traded firm had cash balances of $1.14m as at 31 May.

As a result of that current cash balance, and in order to provide additional financing to deliver the board's updated business plan, the board said “market soundings” with new and existing potential cornerstone investors had taken place.

“Some of the investment terms put forward in these discussions included a number of onerous conditions which the board considered were not in the best interests of shareholders.

“As such, the board is currently evaluating alternative sources of near-term funding, which may or may not be forthcoming, within the next three to six weeks.”

If alternative sources of financing were not available, the board said it would be required to “take action” to protect the interests of creditors.

“[These actions] could result in the value attributable to shareholders being severely reduced or becoming nil.

“Further announcements will be made at the appropriate time,” the board said.

The group's business plan for the coming months focussed on furthering its enterprise customer strategy by establishing additional “high value” relationships with blue chip multinational customers from a variety of sectors, whilst optimising the cash requirement of the business and shortening the path to profits, the board explained.

That was planned to be achieved by implementing a number of actions intended to further focus and streamline the business, including a reduction in fixed salaries and fees of the management team and board and a shift towards a more incentive-based remuneration approach.

Blur said those actions also included a plan to assess the suitability of current rented office space and evaluating potentially more efficient alternatives as the current head office lease reached its expiry.

It also planned a “more tightly focussed” sales and marketing effort prioritising specific enterprise targets, to maximise the return on investment, as well as ensuring delivery teams were “appropriately sized” as platform roll outs were achieved with higher levels of automation across Blur's platform.

The company said it was also ensuring an “appropriate level of investment” was made into its technology, given the recent releases increasing both automation and functionality, alongside the optimisation of its overall operational costs, providing “sufficient resources” for current levels of trading as well as the ability to grow revenues.

“Through the progress achieved so far in increased automation in the Blur software platform and implementation of the actions above, blur expects its 2018 cost base to be less than half that in 2016 which the company expects to lead to improvements in EBITDA performance,” the board claimed.