Outsourcery plans emergency fundraising and disposal

Outsourcery, the cloud services company set up by former Dragons' Den investor Piers Linney, has warned that it needs to raise emergency cash and that growth from its main revenue channel continued to slow.

On Monday Outsourcery said gross cash had dwindled to £0.9m and that it was examining the potential for a fundraising, restructuring and the disposal of non-strategic business assets in order to generate some short-term working capital.

Management have begun talks with lenders to agree consents to the current agreement to allow them to carry out a plan that will provide working capital for the ongoing unified communications business, implying the plan is to dispose of the infrastructure-as-a-service business.

Last September, Lawrence Jones, owner of internet hosting provider UKFast, invested more than £1m in taking a 10.5% stake in the loss-making firm. In July, Outsourcery agreed a £4m term loan with Vodafone for the 48 months ending June 2019, with an attached warrant over 3m new ordinary shares at 30p per share.

In a trading update on Monday the AIM-listed company argued that while full year results and current trading remained in line with directors' expectations, revenue growth via its primary route to market had been hit by further partner product launch delays, which was argued was outside of its control.

At the release of interim results last year the company said the third-party channel, which includes Vodafone and Virgin Media, had been growing at "slower than ideal" rate.

For calendar 2015, Outsourcery said it had generated revenue of £8.1m, up 9% on the previous year, with monthly recurring revenues up 14% to £0.7m.

Adjusted losses before interest, tax, depreciation, amortisation also improved to £4m from £4.6m, with adjusted losses from continuing operations, which excludes restructuring costs, employee share based payment costs and listing fees, improved less markedly to £6.2m from £6.3m.