Increased revenues and prudent cost cutting helped online business-to-business marketplace creator CloudBuy PLC (LON:CBUY) to narrow its losses in the first half of 2017.
CloudBuy’s flagship PHBChoices marketplace continues to be the key revenue driver and is making “positive progress” with a quarter of clinical commissioning groups (CCGs) – essentially local NHS healthcare commissioning body – either contracted or in advanced discussions.
This marketplace enables patients, or their carers, to purchase goods and services from suppliers that support their care plan agreed with their CCG.
The AIM-quoted group launched the second generation of PHBChoices back in March and after a successful trial period, CCGs will be going live with standard contracts from next month.
Contracts won in 2016 are continuing to generate revenues this year, CloudBuy added.
Away from the UK, the company is working with the United Overseas Bank in Singapore, while it is also provides a B2B marketplaces for the Confederation of Indian Industry.
Initial work on its first project with the Federation of Egyptian Chambers of Commerce, on which it is working with Efinance and Visa, is also underway.
Cost-cutting paying off (literally)
CloudBuy has been working hard to reduce its cost base over the past year or so and said today that those efforts are paying off.
Administrative expenses were slashed by more than a third to £1.73mln (H1 2016: £2.64mln), while the charge-related to share-based payments also came down to £248,000 (H1 2016: £348,000).
That, coupled with a 4% rise in revenues to £819,000 (H1 2016: £785,000), helped the pre-tax loss narrow significantly to £1.48mln from £2.4mln a year earlier.
Full-year loss to be ‘significantly lower’ than in 2016
“During the first half of the year we continued to make positive progress with PHBChoices through our customer, NHS SBS,” said executive chairman Ronald Duncan.
“This remains our main focus for growth, supplemented by contracts already won around the world and a limited number of new opportunities including in the Middle East.”
“The expected progress on these key contracts and cost reduction measures already taken will result in a significantly lower loss for 2017 compared to 2016.”
Duncan added that revenues and operating profits (excluding share-based payments), will be broadly in-line with market expectations this year.
Almost £1.5mln in the bank
Back in May, CloudBuy drew down the final £1.48mln of its £5.75mln loan note financing from Roberto Sella.
That helped to top up the coffers, which currently sit at £1.496mln.
Should all the convertible loan notes issued to Roberto Sella be converted, he would have a 42.9% stake in the company.