Even though it is a small player in the market, AIM-listed @UK’s decision to raise funds twice since last December (see here) despite a rising revenue trend was puzzling. But in its year end results announcement the cloud-based procurement software supplier revealed the reasons for its dashes for cash – its ambition to compete for large government contracts, plus increased staffing to push sales further forward.
The company is already benefitting from the government initiative to encourage smaller vendors. It has secured the NHS Sustainability contract to carbon footprint the NHS. It has also been awarded a place in all 4 lots of the new G-Cloud framework, although we have yet to see how the G-Cloud contact awards will pan out and to what extent SMB’s will benefit.
An better balance sheet is expected to improve @UK's position when competing for future large government contracts. The balance sheet certainly has improved. Along with a 15% increase in revenue to £2.4m and lower losses after tax (losses decreased 84% to £88k), it is burning less cash (£50k vs £292k), and ended the year with cash of £420k compared to £29k. There is good news on the sales development front too – an enhanced sales team and process generated c£1m in proposals to 67 potential customers during the first three months of 2012. There is a long way between proposals and sales but @UK's strategy does seem to be working out.