Cashed-up Plexure eyes acquisitions to accelerate growth as loss shrinks

Tuesday 21st May 2019

Plexure Group more than halved its annual loss as the cashed-up mobile advertising firm boosted revenue, and it's now looking at acquisitions to accelerate that growth.

The tech minnow is sitting on $12.7 million in cash, after McDonald's paid $5.4 million for a 9.9 percent stake, adding to the $7.3 million at the end of the March financial year.

Chair Phil Norman said the company expects to build its relationship with McDonald's with new products and services, and anticipates winning new customers in the 2020 financial year.

"Given the cash resources the company now has available, the board may also consider acquisitions to accelerate its organic growth strategy, secure new technologies or source pools of talent," Norman said in the annual report.

The shares jumped 7.4 percent to 58 cents, valuing the company at $80.8 million. McDonald's paid 39.05 cents a share for its investment in April, a premium to the 31 cents they traded at before the April 2 announcement.

Plexure's net loss shrank to $703,000 in the 12 months ended March 31 from $1.7 million a year earlier, and would have been in the black had it not recognised a $1.7 million change in fair value when holders of a convertible note chose to convert that debt to equity.

Revenue climbed 44 percent to $16.9 million, with the bulk of that growth coming from McDonald's adding 17 more countries in the year. The global fast food giant signed a worldwide deal with Plexure in 2015 and this year invested in the mobile app vendor.

The company's operating net cash inflow rose to $3.9 million from $2.6 million, and it scaled back spending on software development to $628,000 from $944,000.

Plexure boosted its staff to 72 full-time equivalents and contractors, from 43 a year earlier, with its wage bill up to $6.3 million from $4.3 million and its contractor costs rising to $1.8 million from $975,000.

(BusinessDesk)

Comments from our readers

No comments yet