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Cloudbuy confident it's making progress but turnover slips

Cloudbuy (LON:BUY), an operator of online marketplaces around the world, is confident on progress and a growing pipeline of opportunities, it told investors in half year results to end June.

Yiwu.jpg
Pictured is China’s famous small commodity wholesale market in Yiwu

Cloudbuy (LON:BUY), an operator of online marketplaces around the world, is confident on progress and a growing pipeline of opportunities, it told investors in half year results to end June.

But it noted that some  of these opportunities had been delayed for reasons, beyond its control, and that it may undershoot market expectations for its year to December 31, 2015.

Turnover in the six months fell 40% to £0.887mln compared to £1.467mln in the first half of last year due to the shift to a transactional revenue model from a flat fee one, but revenues were  32% higher compared to the previous half, reflecting the initial shift.

Its pipeline of major opportunities had a potential value as at June 30 of £51mln spread over three years, it noted.

Reflecting the group's continued investment in sales and technology, admin expenses increased to £3.658mln from £2.681mln in the first half of 2014.

Progress in the UK, notably, saw the completion of the build of NHS Care Marketplace potentially worth in the directors' opinion £30mln per year based on a 10% take up, while elsewhere there was a contract win in Singapore for marketplace and up to 7,000 websites.

Last month, Cloudbuy inked a memorandum of understanding (MoU) with the government of the city of Yiwu in China to help the marketplace promote itself overseas.

It has also a strategic deal with Saudi Arabia's Bin Shamikh Group to promote its products in the Middle East and Africa.

Executive chairman Ronald Duncan said: "During 2014, we successfully completed the transition from a flat fee revenue model to a marketplace transactional activity model and 32% growth in revenue in H1 2015 from H2 2014 demonstrates our underlying progress."

He added: "Unfortunately, and beyond our the control, some of the more advanced marketplace opportunities have been delayed and will now only contribute a small amount of revenue in the current year, which means the company may undershoot market expectations for the year ending 31 December 2015. 

"Our quick and effective entry into North America, China and Saudi shows that we are able to execute projects globally and provides confidence in our pipeline.

"The company has a strong and professional team who are quickly acquiring and converting the growing numbers of commercial opportunities that will generate rapid and sustained long-term revenue growth."

Separately, Cloudbuy announced that Westhouse, its NOMAD (nominated adviser) and broker had resigned with  immediate effect, and it was in  "advanced" discussions with an alternative.

Shares were suspended from trading on AIM at 7.30am today pending the appointment of a new Nomad.

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