In its first set of full results following its October 2012 IPO (see here), blur Group is performing in line with its own expectations. What that means is that revenue is soaring, but so are losses and it is burning cash at a rapid rate.
While revenue for the online marketplace provider rose 216% it still only reached $2.81m. However, with 3 more exchanges (taking the total to 8), an average of 80 briefs per month (vs. 3 in 2010), the average brief value up from $1,500 to $16,050, and a fledging partner operation, it is building the foundations of the business. Returning customers are up to 25% (vs.15%) which is positive too.
All this activity comes at a high cost though. Operational losses rose from $675k to $1.87m for the year to December 31 2012. Bad debt provision and share-based payments contributed to the loss but the major cause was the doubling of administrative costs from $1.06m to $2.60m - virtually the same as annual revenue. Cash is flowing out of the door too. The company ended the year with $4.45m in the bank, which includes the net proceeds from the $6.11m IPO. Operating cash outflow was $2.16m. At that rate there is only a finite period of time to correct the balance between income and losses.