Proxama's losses widen; share placing announced

24th Jun 2016 10:07

(ShareCast News) - Mobile payments and marketing company Proxama reported a wider pre-tax loss in the year ending 31 December 2015, but revenue increased and the company announced plans for a £2m share placing.The pre-tax loss widened to £6.1m from £5.9m in 2014, despite revenue rising to £2.5m from £650,978 on the back of a solid performance in the digital payments division.Earnings before interest, taxes, depreciation and amortisation decreased from £5.6m to £5.3m and administrative expenses rose to £8.6m from £5.8m. Proxama said on Friday that it hopes to raise £2m through the placing of 666.7m shares at a price of 0.3p. The placing represents about 39.1%.of the company's enlarged share capital following admission to AIM. The price of the placing represents a discount of around 58.6% to the closing price of 0.725p on Thursday.The company said the £2m placing should be sufficient to see Proxama to cash break-even by the end of 2017 and provide sufficient time to complete the sale of the digital payments division. Proxama said discussions regarding the potential sale of the division have taken place with a potential buyer who has submitted a letter of intent with an indication of $10-12m as a price range to acquire the business. The potential buyer's due diligence is underway and discussions are active, but there can be no certainty an offer will be made.Chairman David Bailey said: "2015 was an important year for the company during which both divisions made significant progress. Proxama marketing now has agreement for and is in the process of establishing a c. 50,000 strong beacon network primarily focused on London transport hubs. The first advertising campaigns are now running on the beacon network which is generating further interest from other potential partners as they can now see the network in action."The Digital payments division performed well, securing a number of key contracts during the year. As part of the company's strategic review the company is in discussions with potential purchasers of this division and has today announced a proposed equity placing which will ensure the Company has sufficient time to complete the sale as well as support the business to cash break even in 2017."At 1250 BST, Proxama shares were down 42% to 0.42p.