EVR Holdings dives as costs dwarf revenues

Virtual reality music content creator EVR Holdings saw its shares plummet on Thursday as it reported an almost doubled annual loss in its first year of returning revenue.

The AIM traded company registered a loss before tax of £11.4m for 2018, an 83% increase over the year before, as the combined effect of administrative expenses increasing by 82% to £11.3m and a maiden cost of sales of £1.4m more than offset the impact of EVR's first revenues, which came in at £1.2m.

The matter of cost of sales outstripping revenue was attributed to the deduction of content creation costs and amounts due to rights holders, including commissions and revenue share arrangements.

Overall, EVR said the loss was "reflecting our investment in people and our operating capabilities as we scaled up for launch and ready the business for the next stage of its development" as it geared up for the release of its MelodyVR music platform in May last year.

The official launch took the shape of an inaugural live stream event with former One Direction member Liam Payne more than six months later in December, which was broadcast from London to 26 countries on MelodyVR and Facebook, with the content having achieved "more than" 127,000 views to date.

At the end of the year, EVR had cash and cash equivalents of £19.3m, up from £12.4m at the same point the year before, after it raised £20m (before costs) via the issuance of new shares.

Anthony Matchett, executive chair of EVR, said: "We are reassured by the experiences of those who have already experienced our immersive content and are confident that given the right access, awareness and availability of our content, user numbers and the quality of engagement will deliver profitable growth. We will, therefore, continue to invest in key marketing and product initiatives, to accelerate reach and believe that at scale we will benefit from substantial revenues and improved margins."

EVR Holdings' shares were down 20.00% at 3.00p at 1314 BST.