Infoserve Group has reduced its full year loss and improved productivity per sales person, however, the company remains short of cash.
Getting the right people for its sales force has proved difficult for the online local search marketing business. Productivity per sales person jumped 18% to £54,800 in the year to March 2009.
Revenues rose by one-fifth to £5.6m. The improved sales productivity has helped to improve margins. Admin costs have been cut by 18% during the year. The loss was cut from £2.89m to £992,000.
Internet advertising has overtaken display advertising in the press in terms of UK advertising market share. This is a huge potential growth area but Infoserve may find it difficult to take advantage of this.
Management says that it will not be able to continue to grow at this rate without more cash. Net debt is £3.41m at the end of March 2009. Major shareholder David Hood has lent £3.46m - that increased by £419,000 over the past year. One of his businesses is deferring rental demands to Infoserve. The company is also behind in its payments to HMRC but is complying with an agreed payment schedule. Infoserve is talking to Hood and other shareholders about raising money.
Infoserve ended bid discussions in June 2009.
At 6p a share, Infoserve is valued at £1.14m. A share issue is likely to be highly dilutive.
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