Sign up Australia
Proactive Investors - Run By Investors For Investors

blur's focus on larger corporations starting to bear fruit

The slump in the value of the pound since the EU referendum vote has done no favours to blur, which reports in dollars, though it holds its cash in sterling
Project management online. blur specialises in crowd-sourcing talent
The group further developed its enterprise pipeline in the second quarter

The second quarter update for blur Group PLC (LON:BLUR), the enterprise services platform & marketplace operator, showed a continued improvement in the quality of revenues.

The group is focused on large enterprise customers, and this has led to “significant quarter-on-quarter improvements to EBITDA [underlying earnings], gross profit, costs, collections and cash burn,” chief executive Philip Letts told investors.

The company said that as a result of its enterprise strategy, higher margin revenues increased by 75% in the second quarter from the first quarter, driving a gross profit for the period.

Underlying cash burn during the quarter was down to US$1.1mln from US$1.5mln in the preceding quarter, excluding foreign exchange movements and the first quarter’s research & development tax credit of US$0.5mln.

The slump in the value of sterling since the EU referendum vote has affected blur's US dollar reporting, with the cash balance (held in sterling) taking an unrealised exchange hit of around US$700,000 over the first half of the year; however, as mentioned above, the group holds its cash deposits in sterling so the operational impact is negligible. At the end of June, cash stood at US$4.3mln, down from US$5.8mln at the end of March.

The reporting period saw a reduction in the number of projects kicked off and pitched on, but this was largely offset by an increase in the average project value, meaning that the total value of kicked off projects fell by just 2% quarter-on-quarter.

blur's operating efficiency continued to improve, driving a reduction in operating expenses of 22% in the second quarter (Q2), compared to Q1 2016 and by 41% compared to Q4 2015.

"The current macro-economic uncertainty means that cash optimisation, driven by better cost control, is moving to the top of the corporate agenda. This was highlighted by Deloitte's recent Q2 2016 CFO survey, with reducing costs and increasing cash flow being the top two balance sheet priorities for the first time in more than a year,” Letts said.

“Whilst we don't expect these trends to have an immediate impact on blur's revenues, over time we do expect an increasing number of large enterprises to prioritise reduction of their indirect spend,” he continued.

"While blur saw a reduction in project numbers in the quarter, the early phases of the group's relationships with larger corporates is characterised by longer sales cycles, together with wider variations in the volumes and values of projects. In Q2 we saw an increase in the average value of projects kicked off, meaning our total value of kicked off projects was broadly unchanged from Q1.

"Engaging with high quality, higher margin, repeating enterprise accounts remains blur's strategic focus and we are committed to becoming the indirect business services spend platform of choice for those customers. Achieving wider roll outs of our platform in these larger organisations is key to blur's path to sustainable profitability," Letts concluded.

View full MAIS profile View Profile

Maistro Timeline

Video
September 27 2018

Related Articles

Top-level domains
Fri
In its interims, management undertook a full review of historic legacy agreements that led to a final US$721,000 final restructuring payment made against one agreement and an onerous contract provision on another resulting in a one-time write down for future expected losses of US$7mln with an associated US$4.1mln reduction in intangible assets to US$81.5mln.
Mergers & acquisitions - takeover
January 11 2018
"Vermeg's acquisition of Lombard Risk will create a leading global financial software provider," said Badreddine Ouali, founder and chairman of Vermeg
mobile phone user
September 20 2018
“We want to be in situation where we are processing the lion’s share of the biggest merchants’ digital business to mobile users”

No investment advice

The information on this Site is of a general nature only. It does not take your specific needs or circumstances into consideration, so you should look at your own financial position, objectives and requirements and seek financial advice before making any financial decisions. You acknowledge and understand that neither the Company, its related bodies corporate, the information providers or their affiliates will advise you personally about the nature, potential value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter. You should read our FSG and any other relevant disclosure documents and if necessary seek persona advice prior to making any investment decision.

You understand and agree that no Content (as defined below) published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person.

You understand that in certain circumstances the Company, its related bodies corporate, the information providers or their affiliates may have received, or be entitled to receive, financial or other consideration in connection with promoting, and providing information about, certain entities on the Site and in communications otherwise provided to you.

You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate. From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

Before you act on any general advice we provide, please consider whether it is appropriate for your personal circumstances.

© Proactive Investors 2018

Proactive Investors Australia PTY LTD ACN:132787654 ABN:19132787654.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use