Technology firm Blur close to collapse as it loses 99pc of its value

A BRITISH technology company that once promised it would become the “ebay for business services” is close to collapse as it runs out of cash.

Blur Group’s shares fell 60pc yesterday as it said the company may fall into administration after it had been unable to raise emergency cash and stem its losses.

The Aim-listed company, once valued at £235m, has lost more than 99pc of its value amid a string of profit warnings, emergency cash calls and accounting scrutiny.

It warned investors yesterday that their holdings could be worth nothing and said it would cut its employees’ pay after running low on cash.

The company said it had tried to raise new funds but potential investors had demanded “onerous conditions, which the board considered were not in the best interests of shareholders” and it needed new funding in the next six weeks to keep it afloat. “If alternative sources of financing are not available, the board would be required to take action to protect the interests of creditors and which could result in the value attributable to shareholders being severely reduced or becoming nil,” Blur said.

Cash reserves have dropped from $1.7m (£1.3m) to $1.14m in two months, with little sign of the business getting a grip on its losses. Blur, an online marketplace for professional services such as accounting, marketing and legal help that takes 20pc of fees, floated in 2014. It twice raised extra funds as its share price soared but losses have seen its value collapse. An investigation by the Financial Reporting Council forced it to restate its results for 2013.

Blur said it was cutting salaries and basing pay on sales incentives, as well as assessing a move to a cheaper office.

It said it would introduce a “more tightly focused sales and marketing effort” and ensure that “delivery teams are appropriately sized”, suggesting job losses were on the way. In 2015, the last public figures, headcount at Blur fell from 65 to 50. It said it planned to halve 2016’s costs by next year. Blur, which is scheduled to report annual results next week, also said “board changes” were likely. Philip Letts, its chief executive, has led the company since it was founded in 2006.

Despite teetering on the edge of administration, Blur insisted it continued to expect improvements in profitability. It said recent trading had been in line with expectations. Shares, which touched 800p in 2014, fell to 3.4p yesterday.