Wednesday 17th November 2021
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Auckland, New Zealand, November 17, 2021 - Plexure Group Limited (NZX/ASX: PX1), today announced its interim results for the six months ended September 30, 2021, covering the period prior to the merger with TASK.
The Company reported a net loss attributable to shareholders of $8.5 million for the period, including $2.1 million in relation to the TASK acquisition and higher recruitment costs. This result compared with a net loss of $4.4 million for the prior comparative period (PCP). Plexure’s total revenue for the period was NZ$13.5 million, which was 7% lower than last year. Operating expenses grew by $3.0 million to $21.8 million as the Company pursued a cost intensive strategy to invest for growth. This strategy had been predicated on strong sales growth, which has not occurred. In addition, IT costs from existing client activities also increased by 40% versus last year. Net cash utilised in operating and investing activities was $9.8 million for the six months, excluding investment in term deposits of $0.6 million. This was up from $5.4 million in the prior year. The cash balance on September 30 included funds provided from the capital raise, which were utilised on October 1 to part settle the purchase price for TASK.
Plexure’s acquisition of TASK aimed to combine complementary platforms to deliver greater value for an expanded customer base.
Post the completion of the merger, the new executive team, led by the CEO have completed an operational review with the goal of delivering the benefits of the merger.
Prior to the TASK acquisition, Plexure’s investment strategy reflected the need to broaden the application of its platform beyond its major customer in order to grow revenue. That strategy involved significant investment and accounts for the significant losses at Plexure.
The operational review has concluded that the previous strategy has not generated material sales, and is no longer relevant in a group which has a broad, state-of-the-art platform in the combined TASK + Plexure offering.
Supply shortages for hardware have slowed TASK’s growth. This is an industry-wide phenomenon (evident from results announcements of major competitors to TASK including NCR, Agilysys, PAR and Lightspeed) which is a direct consequence of Covid-19. These delays will impact not only the timing of hardware sales but the commencement of software revenue for relevant clients.
This impact is likely to be significantly outweighed in the medium term by strong market demand for the combined Company’s technology.
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