Shares in risk management software group Active Risk tanked on Monday after the company reported that losses had widened in the first half as a result of higher investment in marketing and product development.
The firm, which develops the 'Active Risk Manager' (ARM) web-based risk management solution, said that revenue rose 11% in the six months to September 30th from £3.39m to £3.77m, helped by an additional nine new ARM customers added during the period.
However, loss before tax totalled £0.8m, compared with a loss of £0.63m the year before, as the cost of sales, which includes the costs of our software development, consulting and support resources, jumped 18% from £1.54m to £1.82m.
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The company did note that its strategy to broaden its sales pipeline to reduce the dependency on major deals is bearing fruit, though large deal discussions also remain ongoing.
"Over the last two years, we have reshaped the business. This has included transforming our sales and marketing teams, re-building our position in the USA and establishing an office in Australia as well as taking out unnecessary cost," said Chairman Lynton Barker.
"We have also sought to respond to changing market conditions. As part of this we revised our approach to new business, directing more of our sales and marketing activity towards generating a broader pipeline of opportunities within our chosen market sectors.
The company had net cash of £2.3m by the end of the period, down from £3.3m at March 31st. As in previous year, it is not paying an interim dividend, saying that its focus is on building cash reserves "that are appropriate for the scale of our business."
Shares were down 15.09% at 22.5p in afternoon trade.
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