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Phorm Posts Financial Losses for 2007

Posted: 10th Apr, 2008 By: MarkJ
Phorm has taken more flak for its controversial advertising system than a B-17 flying over Germany during the peak of World War II, yet despite this they have continued to try and win over the support of the Internet industry and several major UK ISPs.

Naturally developing such technology takes a lot of cash and the group’s latest results show that Phorm saw pre-tax losses almost triple in 2007:

Data from Sharecast:

In 2007, losses before tax widened to $32.1m from $11.5m in 2006 after sales and administrative expenses rocketed to $28.7m. Research and development costs ballooned to $3.8m from $0.6m. Revenue from continuing operations totalled $1.3m. There are no comparative revenue figures for 2006 because the company transformed the nature of its business as reflected in its name change from 121Media to Phorm/

At the end of 2007 the company had cash and cash equivalents of $16.6m, up from $3.8m at the end of 2006, following the successful placing of shares which raised $30m before expenses. The company is virtually debt free.

In March 2008 the company raised another $65m (£32m) before expenses through another placing of 1.6m new Phorm shares at £20 per share. The newly issued shares represent about 11.6% of the enlarged issued share capital of the company.

However, Phorm's initial start to 2008 has been financially strong, partly because any impact as a result of recent concerns would not show up until the Q2-2008 figures emerge later this year. Meanwhile Phorm has responded to the ICO's updated statement, giving it a positive spin:

Phorm:

We feel that this is a real endorsement of our position: Phorm has said consistently — and the advice we have been given all along — is that we comply with, and indeed exceed, the standards necessary under all applicable UK law.

The ICO letter contains a very detailed description of our service, demonstrating the ICO’s highly informed understanding of how the system works. In particular, the focus on personal data, openness and transparency and the noting of reassurances that we have given the ICO on user privacy protection is most welcome.

The statement makes clear that the ICO will look at Phorm in the context of DPA and PECR. While we fully discussed DPA with ICO, we’ve not yet had the opportunity to discuss PECR with the ICO but will do shortly. However, the law is quite clear stating that any system requires valid, informed consent.

The debate continues..
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