Plexure shares sink as company concedes expensive growth push prior to merger failed

Craig Herbison, Plexure's former chief executive, left the company abruptly at the start of August. Photo / Dean Purcell.

Mobile technology company Plexure has announced an operation review to trim staff and possibly drop its dual listing after reporting its loss almost doubled in the six months to September 30.

Plexure, which makes mobile marketing, ordering and loyalty apps for smartphones, revealed an interim net loss attributable to shareholders of $8.5 million on Wednesday, up from $4.4m for the same period a year earlier.

By 11am its shares were down more than 11 per cent at 46c and are hovering near a low of more than two years hit last week.

Plexure is part-owned by McDonald's, which uses the company's software internationally. While the contract boosted the company's reputation, it had struggled to broaden its customer base prior to a merger with Australian group Task which was completed in October, just after the period covered by the results ended.

In a statement this morning, Plexure said its revenue dropped 7 per cent to $13.5m despite its operating expenses rising $3m to $21.8m "as the company pursued a cost-intensive strategy to invest for growth".

It added: "This strategy had been predicated on strong sales growth, which has not occurred."

An operational review had concluded "that the previous strategy has not generated material sales, and is no longer relevant in a group which has a broad, state-of-the-art platform in the combined Task + Plexure offering".

It is also poised to kick off a consultation process about its operational structure over the next two weeks.

"Following this, Plexure will address further synergies, including platform efficiencies and overhead reductions, including a potential consolidation into a single exchange listing," the company said.

"In parallel, Plexure intends to work with existing customers to deliver mutually beneficial commercial outcomes. Combined, these steps intend to return Plexure to a path towards profitability."

The company, now run by what was the management of Task, said it had a positive outlook for the combined group.

The results included a series of recent contract wins, which included an expanded deal with Compass, one of the world's largest food-service groups, cafe chain Gloria Jeans which will use Task's technology in 50 US stores, Sky Stadium, Starbucks and an expanded deal with Pita Pit.