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April 10, 2015

blur Group to draw a line under legacy revenue recognition issues

Results from blur (LON:BLUR) may be delayed as it looks into the slow progress on some old projects on its business services platform.


The e-commerce firm, which specialises in crowd-sourcing, has determined that a number of projects kicked off in late 2013 and early 2014 have a low probability of ever being completed, which will affect the revenue due to blur.


As a result, the revenue for 2014 will be substantially lower than previously expected.


The company and its auditors are in the process of dealing with enquiries from the Financial Reporting Council on how it intends to treat these contracts in its accounts, hence the likelihood of a delay in the release of the results.


The contracts date from a period before blur switched to a more conservative policy of recognising revenue, and David Sherriff, blur's deputy chairman said the current process "will draw a line under certain older projects" and complete blur's transition which started with the updated revenue recognition approach announced in the second quarter of 2014.


The company's net cash position remains in line with expectations at US$17.4mln, and company chief executive and founder


Philip Letts said the company's focus this year remains on growing the business to reach profitability in early 2016.


Sherriff added: With the increasing mix of enterprise customers over recent quarters the business is benefiting from better project completion, higher repeat business and tighter invoicing to cash."



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