LONDON (Alliance News) - Phorm Corp Ltd Friday posted strong revenue growth for the first half of the year, but said it narrowed its loss slightly in the half year, as lower administrative and research and development costs offset surging cost of sales.
The internet personalisation technology company reported a pretax loss of USD23.0 million for the six months to June 30, compared with a USD24.8 million loss in 2013.
Cost of sales multiplied to USD4.0 million from USD541,464 a year earlier, as revenue increased to USD528,750 from only USD28,545 in the first half of last year, driven by an increase in users and advertising requests.
However, Phorm said reduced sales and administrative expenses and research and development spend offset the rising cost of sales.
Phorm said it is now entering the revenue growth phase of its business. Users, partnerships which bring it inventory in the form of advertising requests, and advertising campaigns sold and successfully delivered, are the fundamental drivers of the company's revenue.
The company's technology is currently deployed with 10 internet service providers worldwide, compared to only one ISP a year ago.
"Phorm is now in the fortunate position of having set the foundations for achieving substantial growth," said Chairman and Chief Executive Officer Kent Ertugrul in a statement.
In a separate statement Friday, the company said it raised approximately GBP2.4 million before expenses via a subscription for 26.5 million shares at a price of 9 pence per share. Phorm shares rose 5.9% Friday morning, to the placing price of 9.00 pence.
The company said it will use the proceeds for general working capital purposes.
Phorm also said it is currently in "advanced negotiations" with some investors regarding a potential further sizeable tranche of investment. The company had raised GBP10.0 million gross from a share placing with US investors in March.
The company said its average monthly cash burn, excluding financing activity, was USD3.6 million in the recent half, up from USD2.6 million per month a year before. Phorm had USD5.9 million in cash on June 30, down from USD9.7 million on December 31, 2013.