News blog
Synchronica
- BY: Andrew Hore |
- POSTED: 17/10/2011 |
Mobile messaging services provider Synchronica is planning to reduce its cost base to bring it into line with recurring revenues.
Synchronica estimates that it generated revenues of $6.6m in the third quarter of 2011, with 90% of those revenues recurring. Acquisitions have boosted revenues in the period.
Cost savings will come from fully integrating recent acquisitions. This will cost $2m and there should be annualised savings of at least $12m. Costs should then be in line with recurring revenues of $3m a month.
There are still short-term cash flow problems. Some customers have agreed to pay early in return for a discount. Invoice factoring may also be used. Delayed payments of $2m from mobile device manufactures should be received in the second quarter of 2012.
At 8.5p a share, Synchronica is valued at £10.9m.
Northland has slashed its 2012 revenue forecast from $56.1m to $36m. A profit was expected in 2011 but that has been turned into a loss and the 2012 profit forecast has been reduced from $14.2m to $3.8m. Cash should start to be generated during 2012.
Download the latest AIM Journal from http://www.hubinvest.com/AIMPDFOctober2011_25.pdf
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