Fusionex crashes to new low despite assurances and director dealing

With shares in Fusionex International having lost almost two thirds of their value in four days, chairman John Croft has dipped into his personal coffers in order to prove the software group's board is confident in the business.

The company revealed on Tuesday that Croft splashed out roughly £20,000 as he bought 13,800 shares at a price of 148p apiece on Monday, to more than double his stake to 24,800 shares.

When the Malaysian company issued results last Thursday its shares fell to 215p, their lowest level since their 2012 flotation, with investors lamenting the sharp rise in outstanding receivables payments and raising concerns about aggressive investment plans that will send it into the red this year.

Since then they have collapsed to 113.45p despite Croft's attempted intervention.

As well as the chairman's purchase, Fusionex issued a clarification on Monday to try and placate investors, saying it understood that the share price may have been affected by commentary regarding perceived poor cash collection in the period.

Looking to clarify the position, the company said: "Cash collection for the year was adversely affected by an increase in trade receivables as a result of the business moving increasingly to channel partners which enable Fusionex to support scalable growth and wider market reach.

"These channel partners however require extended terms of trade, which is not unusual in the software industry and has resulted in this increase in receivables."

Since the year end, Fusionex has collected receivables of 23.4m Malaysian ringgit (£3.8m) out of the year-end receivables of RM28.5m (£4.6m).

Plans to swell the customer base of GIANT, its flagship Big Data analytics software, from the current 36 customers to 90 in the current year will lift sales to MYR 99m but send the group into the red due to increased spending on R&D, marketing and general headcount, a move into the new geographies of Vietnam, Australia, China and Taiwan, together with increased hosting charges from off-premise GIANT sales.