Netcentric to raise funds before end of September

At the end of March Netcentric had reduced its cash reserves to 1.03m, from 3.66m six months earlier, demonstrating a monthly burn rate of approximately 438,000. In today's statement, the company said its future as a going concern “is dependent on the ability of the company to raise sufficient working capital from the sale of investment properties, cash flows from operations, and through the raising of additional funds by the end of September 2001 through a placing and open offer”.

Gerry Thompson, COO of Netcentric, was unable to clarify the statement or explain if the company's future was contingent on the success of all three cash generating proposals.

The company expects to receive 2.85m in net proceeds from the disposal of its properties, which will be used as working capital. The cash flow statement was not included in its results, and Thompson said he was not sure how much the company was planning to raise through the placing.

In its results for the six months to March, released today, the company reported a 248% hike in pre-tax losses to 3.23m, alongside a 14.5% increase in turnover to 466,000. Netcentric attributed the weakness of its sales on the fact that the bulk of its revenues are typically subject to lengthy sales cycles, while its high losses were due to continued investment in the development of its principal web content management product, Lychee.

During the period, Netcentric won contracts with Baring Private Equity Partners, Lloyds TSB, and BT Cellnet.

By 4.30pm, shares in Netcentric were down 14.29% at 3p.