Plexure to cut workforce by a quarter in effort to generate positive cash flow
By Paul McBeth
June 30 (BusinessDesk) - Plexure Group, the digital advertising firm formerly called VMob, plans to trim its workforce by more than a quarter in an effort generate positive cash flow by the end of the year.
The Auckland-based company will cut nine permanent jobs and six contract staff from its 55 strong workforce from August in a restructure as the digital ad firm's product development stage ends and it sees growing demand for professional services. From August Plexure will operate in four streams: sales and account management, core product development, professional services, and administration.
"Along with architectural advances leading to a more efficient use of costly cloud resources, this organisational restructuring will enable the company to accelerate its move towards profitability," chief financial officer Andrew Dalziel said in a statement. "The company is confident that the reduction in operational headcount will have minimal impact on its ability to deliver high quality services for its current customers and to meet its 2017 sales targets."
Plexure narrowed its annual loss to $6.5 million in the year ended March 31 from $6.6 million a year earlier on an 11 percent gain in revenue to $7.3 million. While its staff wage bill fell 10 percent, or $668,000, to $5.4 million in the year, it spent $720,000 on contractors, up from $408,000 a year earlier.
The firm's key management, including executives and directors, was paid $2.3 million, up from $2 million a year earlier, of which chief executive Scott Bradley was paid $719,185 including $146,097 to cover living costs in San Francisco when he relocated to help drive growth in the US. That was up from $609,635 in 2016, of which $133,289 was for living costs. Bradley has since returned to New Zealand and his salary has been adjusted accordingly, Plexure said in its annual report, also released today.
Chairman Philip Norman said Plexure's revenue growth was slower than preferred in the 2017 financial year, but that he expected it to accelerate in 2018 "as our penetration of existing customers deepens and new customers are acquired".
Auditor Deloitte noted Plexure's ability to continue as a going concern as a material uncertainty in its report. The board adopted the going concern basis on the expectation of raising new capital, something they said they were confident of achieving.
Plexure operational cash outflow widened to $4.7 million in the year ended March 31 from $4.5 million a year earlier, and after financing and investing activities left it with cash on hand of $615,000.
The company's shares last traded at 9 cents and have slumped 72 percent so far this year. That values the company at $8.3 million.