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UPDATE: blur Group hits new high

UPDATE: blur Group hits new high

-- Adds broker comment and share price reaction --

Blur Group (LON:BLUR) has responded to the increasing size of projects on its business services exchange by raising the upper limit on project value.

As recently as April of this year, when blur released version 3.0 of its crowd-sourcing platform, the upper limit on the size of projects that could be submitted to the platform was increased to US$1.0mln, but this has now been increased to more than US$5mln, or US$5mln+, as the company termed it.

While it was always the intention of blur to increase this upper limit, as its services commerce, or s-commerce, model takes hold, the raising of the bar has come ahead of schedule. Blur said the company has seen an increasing flow of projects between the US$500,000 - US$1mln mark since the platform was upgraded.

“Following our oversubscribed round of secondary fundraising, we had said that we were going to use some of the funds to help us attract new and larger businesses to the Global Services Exchange. Since the launch of blur 3.0, we have had a strong flow of larger projects so we are now increasing the project ranges to $5mln+,” declared Philip Letts, blur’s chief executive officer.

“With the continued consolidation of large service providers ringing alarm bells globally, the Exchange is providing a powerful alternative for businesses wanting efficient services solutions appropriate for the digital age. This demand has therefore accelerated a platform change ahead of schedule. This increase helps us continue to create a global meritocracy online, whereby companies and providers of different sizes can work together to deliver best results," Letts added.

Tintin Stormont, an analyst at City firm N+1 Singer, says it is still early days, but blur Group is building on its first mover advantage.

“blur Group is seeing strong traction in disrupting the traditional corporate services industry, a market worth US$2 trillion. There are now 30,000 businesses using the Global Services Exchange with almost 1,200 new businesses adopting blur’s s-commerce platform on a monthly basis,” Stormont said.

“The shares are trading on 13.7x EV [enterprise value]/Sales cal’13 and 5.2x EV/Sales cal’14. We previously published a central case DCF [discounted cash flow] analysis which yielded a value of 233p to 517p using a discount rate of between 10% to 15%,” the analyst noted.

Shares in blur Group were up 10.75p at 302.75p in mid-morning trading, a new high for the company.

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