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Daily Internet

  • BY: Andrew Hore |
  • POSTED: 22/10/2013 |

Internet hosting services provider Daily Internet has raised £3m at a significant discount to the market price and the share price has fallen sharply.

The placing price is 1.5p a share, while the market price fell from 4p to 2.25p following the news of the placing. That values the enlarged share capital at £8.5m.

The cash is being used to finance the £2.5m acquisition of Netplan Internet Solutions, which will broaden the groupís range of hosting services and products. Netplan is an internet infrastructure as a service (IaaS) provider and it has more than 800 customers with 10% of business outside of the UK.

Daily Internet needs to bulk up because organic growth alone will not be fast enough. Netplan has its own datacentre facilities and this will help to reduce the groupís datacentre costs.  Netplan is expected to make an EBITDA of £425,000 in the year to September 2013. There is potential earn-out consideration of up to £750,000.

Daily Internet is also capitalising £762,000 of shareholder loans by issuing 49.2m shares.

Daily Internet is loss-making and it is not expected to move into profit until the year to March 2015. A £400,000 profit is forecast for 2014-15, which still puts the shares on around 30 times prospective earnings.

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