Scoot has until August

For the year ended 31 December 2001, the company posted a massive net loss for 2001 of £180.3m, up from a deficit of £67m in the previous year. Sales improved to £30.7m and Scoot has retained £4.4m in cash, down from £7.3m at the end of 2001.

The loss was mainly due to a £105.5m goodwill write-off following the sale of erstwhile prize asset Loot last September, after purchasing it for £185m in 2000. The company only recouped around one-quarter of the amount it paid for the classified listings business.

The sale of Loot was somewhat forced as it desperately needed to secure additional working capital. Talk of the company going to the wall next month is premature - Scoot has enough cash to carry it through the summer, until August at least. The company had originally forecast that May would be the crunch month.

Scoot MD Terry Martin said the implementation of Project Genesis - the moniker for its restructuring programme - had been successful in reducing costs, while acknowledging that revenue must also grow for the company to survive. Expenses related to Project Genesis totalled £7.5m, comprising redundancy, relocation, contract termination and legal costs.

The company wrote to shareholders last September, as it announced the sale of Loot, to advise of its three options going forward. It could either link up with a strategic partner, continue to trade as a stand-alone entity, or, sell Scoot or its business.

Technology and associated problems during the first half of the year impacted on the level of service offered to paying merchants, and the rate of churn has subsequently increased, even though these glitches have been ironed out. Consequently, Scoot reported that the number of charging merchants reduced to 19,238 to the year-end. It has since added around 1,200 new paying customers and "significantly" reduced levels of churn to 9.5%.

Shares are unchanged at 0.85p, valuing Scoot at £6m.

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