Good morning!

 

 

Blur (LON:BLUR)

The market's doing a pretty good job of scrubbing off pockets of euphoria, and this morning it is deluded shareholders in Blur Group that have had a bucket of cold water thrown over them.

I've never really understood what this company does, nor how it comes anywhere near to justifying such a high market cap, given that it is loss-making. A trading update issued this morning has clearly put a foot wrong in some way, as the shares are down 30% to 307p. Although personally I've read the statement three times now, and don't recognise any of the figures in it. I cannot see turnover or profit mentioned at all!

The RNS says they are "reinventing commerce", which sounds very grand. It just all sounds like a fantasy world to me, which I am not visiting. In fact, I'm kicking myself for not being short of this particular share, as it was pretty obviously an over-hyped story stock with poor fundamentals, in my view.

EDIT: A reader has kindly pointed out in the comments below that there are two announcements from Blur (LON:BLUR) today, one giving various business metrics (which is the one I reported on above), but also a trading update which for some reason slipped through my net.

The company seems to have changed its revenue recognition policy, with the result that some revenues have been deferred. The key section says;

 

As a result, recognised revenue will be lower than expected for the 2013 financial year but with a significant value of deferred revenues relating to these projects now expected to be recognised in 2014 and beyond. Recognised revenue is expected to be in the range of $5.3 million to $5.6 million for 2013 (2012: $2.8m) with total project bookings for the same period of $22.2 million (2012: $2.4m), an +825% increase year on year. Of the remaining project bookings that carry forward, we expect the majority to be recognised revenue in 2014.  This is evidenced by the strong financial performance in Q1 2014.

 

I note that broker forecast for 2013 turnover is $9.9m, so reporting $5.6m is a good way below that, hence the sell-off in the shares today. Although…

Unlock the rest of this article with a 14 day trial

Already have an account?
Login here