This article is more than 1 year old

Outsourcery has ‘greater flexibility to pursue opportunities’ after £4m Voda loan

It plugs a hole, but where are the profits?

Loss-making cloud biz Outsourcery has managed to tap up Vodafone for a £4m loan under a partnership deal.

After yet another successful effort of going cap in hand to investors, the still unprofitable outfit said £2.3m of the loan will be used for "general working capital purposes".

The rest of the cash will replace its existing loan facility. As part of the four-year deal, Vodafone will get three million shares.

The biz has also extended its £1m loan agreement with Etive Capital Limited for another year.

Piers Linney, former Dragons' Den rude boy and Co-CEO of Outsourcery, said today: "Together with our extended loan from Etive, we will benefit from a reduced cost of capital, and have greater flexibility to pursue our growing pipeline of opportunities with enterprise customers and the public sector."

Last year, bosses Piers Linney and Simon Newton promised to relinquish their salaries for the next 12 months in a bid to save the loss-making cloudy biz £500,000.

However, in its latest results, the company revealed an operating loss of £7.03m.

Analyst firm Megabuyt noted that Outsourcery's continued losses, particularly through reseller channels, has led to multiple profit warnings, forecast downgrades and rescue fund raising situations.

"This refinancing gives Outsourcery some breathing space, both bringing in £2.3m in net new facilities and pushing back a potential May 2016 pinchpoint for the repayment of the Etive money."

It added: "It is unfortunate that Outsourcery has not also updated the market on current trading given that the first half is now over. However, we note that the company’s broker has maintained 2015 forecasts at £11.1m revenues, up 50 per cent." ®

More about

TIP US OFF

Send us news


Other stories you might like