cloudBuy PLC (LON:CBUY) plunged in early deals Friday after revenues for its 2018 fiscal year fell by around a quarter amid non-renewal of legacy contracts and a decline in its company formation revenues.
In an update for the year ended 31 December, the eCommerce marketplace and B2B buyer and supplier solutions provider said revenue was due to fall 25% year-on-year, although cost-saving measures implemented meant operating losses would also shrink by 25%.
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The firm said that moving to “profit and cash flow break-even” remained its priority, with year-end cash expected to be £769,000 with an R&D tax credit of £124,000 that was received post-period-end.
cloudBuy said it was currently engaged in two opportunities which together would provide “adequate financing” to allow it to achieve cash flow break even, however, if these did not materialise it would seek new funding including entering discussions to draw down a portion of its £1.7mln debt facility.
However, the group said it was continuing to work with NHS Shared Business Services to onboard individual Clinical Commissioning Groups onto PHBChoices, a platform to manage personal care.
Ronald Duncan, executive chairman of cloudBuy, said the revenue drop was “a disappointment” and had resulted from “lower revenue from contracts won in 2016 and a number of legacy contracts ending and not being replaced by new opportunities”.
“The business strategy remains to focus on revenue from existing customers in the UK, Canada, Singapore and Australia with significant growth expected from PHBChoices in 2019. The first 5 weeks of 2019 have shown good progress from PHBChoices although from a lower base than we had expected."
The firm is scheduled to report its full-year results on March 20.
Shares were down 24.3% at 2.6p.