From the final results dated 23 May 2014:
Cash balance at the year-end was $9.56m (31 December 2012: $4.45m), including net proceeds of $11.4m placing in June 2013. Operating cash outflow for the period was $5.52m, reflecting an outflow from operating activities of $5.86m and a decrease in working capital of $0.33m. Investments in assets totalled $1.09m (2012: $0.27m), reflecting the capitalisation of internal technology costs and small purchases of fixed assets.
This is the most telling section of Blur’s (LSE: BLUR) 2013 results.
Reading through the RNS archive I can’t help but get the feeling that this is a company that likes to spend cash and fund its spending spree by… you guessed it… placings.
This is why looking at cash is so important particularly when existing shareholders are routinely asked to stump up more.
Just check this out from their placing announcement dated the same day as final results came out:
Blur Group plc (BLUR), a business services marketplace in the cloud at blurgroup.com, is pleased to announce that it has conditionally raised approximately $20.0 million (GBP11.9 million) (before expenses) through the issue of 15,873,015 New Ordinary Shares by way of a Placing at 75 pence per New Ordinary Share and up to a further $2.0 million (GBP1.2 million) through the issue of up to 1,587,314 New Ordinary Shares by way of an Open Offer at 75 pence per New Ordinary Share
The Placing Shares will represent approximately 37 per cent. of the enlarged issued share capital of the Company. The Placing Price represents a discount of 28.9 per cent. to the Closing Price of 105.5 pence per Ordinary Share as at 22 May 2014 (being the latest practicable date prior to the date of this announcement).
Nowhere from the announcements that this company makes do I read that they are even remotely near positive earnings having never been able to turn a profit in their history.
What we have with Blur is a company that runs a website (which was slow and clunky when I accessed it) that allows businesses to ‘source and pay for services online’ i.e. a fancy website.
All I’m saying is that if all you’ve got is a fancy website, placings to keep you cash positive and no sight of earnings whatsoever then you are running a charity for the benefit of the businesses you serve and the salaries paid to management.
Oh, lets not forget the options that were handed out on 18 December 2014:
Mr Letts did well out of shareholders there.
Anyone silly enough to be a shareholder of this dog?
If you are a shareholder you need to take a look at this charming little photograph from their Facebook page.