Plexure to cut workforce by a quarter in effort to generate positive cash flow

Plexure chairman Philip Norman said revenue growth was slower than preferred in FY17
plxadd to my Stocks
$
100.000%
Volume:

Plexure Group, the digital advertising firm formerly called VMob, plans to trim its workforce by more than a quarter in an effort generate positive cash flow by the end of the year.

The Auckland-based company will cut nine permanent jobs and six contract staff from its 55 strong workforce from August in a restructure as the digital ad firm's product development stage ends and it sees growing demand for professional services. From August Plexure will operate in four streams: sales and account management, core product development, professional services, and administration.

"Along with architectural advances leading to a more efficient use of costly cloud resources, this organisational restructuring will enable the company to accelerate its move towards profitability," chief financial officer Andrew Dalziel said in a statement. "The company is confident that the reduction in operational headcount will have minimal impact on its ability to deliver high quality services for its current customers and to meet its 2017 sales targets."

Plexure narrowed its annual loss to $6.5 million in the year ended March 31 from $6.6 million a year earlier on an 11 percent gain in revenue to $7.3 million. While its staff wage bill fell 10 percent, or $668,000, to $5.4 million in the year, it spent $720,000 on contractors, up from $408,000 a year earlier.

The firm's key management, including executives and directors, was paid $2.3 million, up from $2 million a year earlier, of which chief executive Scott Bradley was paid $719,185 including $146,097 to cover living costs in San Francisco when he relocated to help drive growth in the US. That was up from $609,635 in 2016, of which $133,289 was for living costs. Bradley has since returned to New Zealand and his salary has been adjusted accordingly, Plexure said in its annual report, also released today.

Chairman Philip Norman said Plexure's revenue growth was slower than preferred in the 2017 financial year, but that he expected it to accelerate in 2018 "as our penetration of existing customers deepens and new customers are acquired".

Auditor Deloitte noted Plexure's ability to continue as a going concern as a material uncertainty in its report. The board adopted the going concern basis on the expectation of raising new capital, something they said they were confident of achieving.

Plexure operational cash outflow widened to $4.7 million in the year ended March 31 from $4.5 million a year earlier, and after financing and investing activities left it with cash on hand of $615,000.

The company's shares last traded at 9 cents and have slumped 72 percent so far this year. That values the company at $8.3 million.

(BusinessDesk)


8 · Got a question about this story? Leave it in Comments & Questions below.

This article is tagged with the following keywords. Find out more about MyNBR Tags

Post Comment

8 Comments & Questions

Commenter icon key: Subscriber Verified

No one has enough skin in this game. Salaries this huge are just crazy for such a tiny company. You would have to argue whether this company is a going concern also

Another Callaghan gem.

Reply
Share
  • 0
  • 0

Agree the salaries are OTT - but I suppose it means the CEO will have been able to put some money aside to particpate in any rights issue / share issue which will have to be at a massive discount - so he wins both ways.

Reply
Share
  • 0
  • 0

I feel this company won't be around in its current form for long unless the talked about capital raise goes ahead.......and geez that will be a difficult ask unless it is at a deep discount to the current share price..Pruning expenses will be seen by some as too little too late.

Reply
Share
  • 0
  • 0

"The firm's key management, including executives and directors, was paid $2.3 million, up from $2 million a year earlier, of which chief executive Scott Bradley was paid $719,185 including $146,097 to cover living costs in San Francisco when he relocated to help drive growth in the US."

Compare that to Xero, where Rod Drury was paid $731,000 to manage a company with 30x the revenue and offices all over the globe and umpteen more employees than PLX. The total Director's fee pool for Xero for 2017 was $486,000.

Living the high-life at the cost of shareholders wealth. A few more names to add to the blacklist, that's for sure!

Reply
Share
  • 2
  • 0

My guess is Rod backs himself to make real money through his shareholding.

Reply
Share
  • 0
  • 0

Indeed he does. Rod still holds about 20.7M shares of Xero, currently valued at $524M @ $25.31 NZD.

Rod ain't going to have to worry about his salary for a loooooooong time to come...

Reply
Share
  • 0
  • 0

Bradley at circa $800k including expenses is paid circa 10% of the market cap. Means Rod should be on $250m a year.

Reply
Share
  • 0
  • 0

https://www.nbr.co.nz/article/plexure’s-shifting-goal-posts-raise-concerns-197662

"Mr Bradley says the company hasn’t given guidance on future capital raises and Mr Wiggs doesn’t understand the business"

Still don't.

Reply
Share
  • 1
  • 0

Post New comment or question

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
CAPTCHA
This question is for testing whether or not you are a human visitor and to prevent automated spam submissions.

NZ Market Snapshot

Forex

Sym Price Change
USD 0.7039 0.0012 0.17%
AUD 0.9220 0.0003 0.03%
EUR 0.6498 -0.0008 -0.12%
GBP 0.5633 -0.0002 -0.04%
HKD 5.4664 0.0089 0.16%
JPY 78.0520 -0.1770 -0.23%

Commods

Commodity Price Change Time
Gold Index 1225.8 -8.270 2017-02-13T00:
Oil Brent 55.6 -1.050 2017-02-13T00:
Oil Nymex 53.0 -0.900 2017-02-13T00:
Silver Index 17.8 -0.110 2017-02-13T00:

Indices

Symbol Open High Last %
NZX 50 7140.7 7174.6 7135.5 0.40%
NASDAQ 5753.2 5771.0 5734.1 0.52%
DAX 11698.0 11812.7 11667.0 0.92%
DJI 20338.5 20441.5 20269.4 0.70%
FTSE 7258.8 7298.5 7258.8 0.28%
HKSE 23695.3 23735.1 23711.0 0.02%
NI225 19478.9 19501.0 19459.2 -0.16%
ASX 5760.7 5794.9 5760.7 0.05%