Outsourcery bottom line loss outweighs top line sales

Cloud services provider Outsourcery has posted steady growth in revenues but has also copped to a substantial loss in its first financial year-end statement since becoming a listed company

Cloud services provider Outsourcery has revealed preliminary full-year results to 31 December 2013, with group sales growing by 44% year-on-year to £5.2m, and recurring revenues growing by 41% to £4.1m, a run rate of around £600,000 a month.

However, EBITDA losses of £7.2m at the firm, which was listed on AIM in May, have indicated the scale of the work to be done to achieve its ambition of becoming a market leader in its field.

In a statement, CEO Piers Linney admitted there was still work to be done but spoke of having put the business in a strong position to attain further strategic growth in 2014.

Outsourcery also pointed out that its losses were stable, and improving compared to 2012, and said its costs and balance sheet were otherwise both well under control.

“When we joined AIM in May last year we promised to expand our partner network; to deepen and activate relationships with existing partners; and to explore new avenues for growth outside of the purely private sector,” he said.

“Some of the biggest names in technology, systems integration and telecommunications are fully engaged and working with us to jointly target end customers and generate revenue.

“Thanks to last December's successful equity placing and our collaboration with Microsoft and Dell, we are moving quickly ahead with our plans to target new routes to growth in the enormous opportunity presented within the UK public sector as Government policy drives cloud adoption.”

Among key highlights for Outsourcery in the past 12 months were major partnerships with the likes of Ingram Micro and Virgin Media Business, the launch of its channel-centric O-Cloud offering, and the expansion of its SME partner network to over 560 resellers since its IPO.

In her analysis of the firm’s results, TechMarketView’s Kate Hanaghan said that a lot of Outsourcery’s successes to date had been enabled by “the deep pockets of the founders”.

She suggested the market would need to see evidence that management was capable of delivering scale in the business and demonstrating its model really did work, and cautioned it would likely be next year before a truer picture of Outsourcery’s financial health would emerge.

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