Data management firm Cirata has raised $7.2m (£5.2m) in a share offer as bosses say 2024 performance is on track despite deal delays.
CEO Stephen Kelly, non-executive chair Ken Lever and senior independent non-executive director Peter Lees all subscribed to the discounted share offer, contributing around $50,000 (£39,000), which is intended to fuel the continued turnaround of the business, which hopes to reach cashflow breakeven as it comes out of 2024.
The Sheffield-based firm, which has operations in Newcastle, California, China, Japan and South Korea, has undergone a major “root and branch” restructuring which has slashed annualised costs from $45m to $23m, with a further $3m to be found in the remainder of this year. The fundraise was launched as Cirata gave a Q2 trading update in which it said bookings for the period were up 143% year-on-year to $1.7m.
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Bosses have kept their expectations of between $13m-$15m bookings this year, despite deal delays meaning the target is “achievable but demanding”. They expect the second half of the year to be more heavily weighted with contract wins.
Meanwhile Cirata, formerly known as WANdisco, is still subject to a Financial Conduct Authority (FCA) investigation surrounding potentially fraudulent activity which wiped £12m off its revenue and caused trading in its shares to be suspended last year. The firm told investors that it still does not know if the FCA could issue a fine which it said could impact its results and reputation.
Stephen Kelly, chief executive officer, told the market the firm was making good progress despite his feeling this was not represented in the headline numbers. But he pointed to improved sales conversions.
He added: “As part of our ongoing efficiency and effectiveness drive, we have started a fresh cost alignment program to further reduce annualised costs from $23m to circa $20m by the end of December 2024. This compares to the overall annualised cost base of $45m at the end of March FY23. Our goal is to deliver sustainable high growth with a fraction of the previous cost base as we improve GTM productivity and market alignment across the company.
“As I have said before, the recovery of Cirata is likely to be non-linear but those who know me understand that I am very ambitious when it comes to the growth aspirations I have for companies I lead. With six to 12 month sales cycles and the need to re-build the pipeline from its embryonic form when the new management team arrived, sustainable bookings growth is taking longer than I had hoped.
“We can, however, foresee some major contracts in Q4 FY24 in the pipeline which bodes well for a strong end of FY24 performance consistent with our retained guidance. I want to thank our colleagues who show great commitment to Cirata as well as our customers and investors for their support.”
Original artice – https://business-live.co.uk/all-about/yorkshire-humber