On-line business information purveyor Phonelink Plc is valiantly battling on against the adversity of mounting losses, but believes it is ready for when, not if, the market really takes off. The Birkenhead, UK company has turned in losses for the six months to September of 3.2m pounds, up from last year’s 2.7m pound losses, on […]
On-line business information purveyor Phonelink Plc is valiantly battling on against the adversity of mounting losses, but believes it is ready for when, not if, the market really takes off. The Birkenhead, UK company has turned in losses for the six months to September of 3.2m pounds, up from last year’s 2.7m pound losses, on revenues up just 2.5% at 2.2m pounds. Finance director Richard Law says the company predicted at its year end that this interim statement would be a holding statement, and the City has treated it as such. Shares remained unchanged at 68 pence. Phonelink says it has continued to invest in new products, and the one it has been waiting for is its electronic commerce offering. This is now ready, it says, and will be put into operation in January through the company’s joint venture with mutual insurer Scottish Widows, The Electronic Market Ltd (CI No 3,039). Law says the company is focusing for now on higher margin, business-to-business sales, and he believes potential users of the Electronic Market have already been primed by the electronic catalogue companies such as Ideal Hardware Plc, which offer catalogs on CD-ROM (CI No 2,819). The Electronic Market has already signed up a business stationery supplier and a computer supplier, and Law is confident that companies will find the move to making this sort of purchase on line easy. As well as working on new products and strategic alliances, Phonelink says it has refocused the marketing strategy for its existing products. While the average of Phonelink’s 5,000 or so users is spending only 4 pounds per week on on-line information with the company, some users are spending 500 pounds or more. The company has therefore been analysing the needs of these big spenders, and targeting similar companies with similar needs. It is then offering training and consultan-cy, to show the lower spenders what they are missing, and the savings they could make in both time and money. On the management side, Phonelink has brought in Graham Ramsey from United News & Media Plc as chief executive (CI No 3,039), and founder Trevor Burke will concentrate on developing new products and strategic alliances. Having raised some 22m pounds by way of placings in the past year (CI Nos 2,894, 2,737), the company has a current net cash balance of 11.8m pounds. Law says he believes this will be sufficient to fund the business and developments in the foreseeable future, but that the company is carefully controlling its cash, and is by no means complacent because it has cash in the bank. Phonelink continues to pay no dividend.