Plasmon on track to being ‘sales-led’ firm; to go ahead with £10m share placement
Plasmon plc, providers of professional archival solutions, reiterated its plan, subject to shareholder approval, to issue 100 million new ordinary shares through a placing to raise £10m.
The company also issued a trading update yesterday. It said that despite softness in US IT markets which has had some impact on its legacy and hardware product sales, the overall archive storage market is forecast to grow from $9bn in 2007 to $23bn by 2010.
The Cambridge HQed firm said its Archive Appliance sales growth remains in excess of 50% in constant currency terms after the first nine months of the current year, compared to the comparable period last year, and is the focus of growth plans.
Plasmon says it has best-in-class solutions for customers in the archive market, particularly those seeking to move essential, but rarely-accessed, data archives from expensive hard disk (RAID) servers to a lower cost, more permanent storage infrastructure tier.
In order to fully capture this market opportunity, new CEO Steven Murphy (pictured), is extending and accelerating the growth strategy. He is building a customer-facing marketing, sales and service channel to win major account business and support Resellers.
The Board said it believes this will enable the Group to deliver significant future sales growth and complete its transformation from a "technology-led" to a "sales-led" business.
Recruitment of new senior sales executives (predominantly US-based) has been underway since late 2007, and most have now been identified and are ready to join the business.
Nine out of 14 of these senior executives have signed offer letters and have had successful careers with industry storage leaders.
Primarily as a result of this investment in a faster growth strategy, Plasmon has deferred its cash break-even target to second half of financial year 2009.
The Group said its growth strategy builds on two successes achieved in 2007. First, the signing of 18 new reseller channel partners and second, a major programme of operational restructuring, which has so far reduced the overhead cost base by 20%.
Plasom expects to reduce headcount by 25% when outsourcing of hardware manufacturing is concluded in June.
Contribution margin on sales is now approaching management's target of 60%, it said.
The company’s shares are quoted at 11.5p pre-market opening, valuing it at almost £14m, down from £21m late last year.
20th February 2008
