Phorm Approaches 'Defining Moment'

Ad targeting company Phorm has continued its cash burn in the first six months of 2012, again making little revenue, but says its Turkish operation is performing sufficiently well to at last make the group 'profitable during the next financial year'.

The company's interim results for the first six months of 2012 show operating losses of $30.7m, up from an already alarming $13.0m a year previously; and losses after taxation were $30.9m ($0.41 per share.

Phorm says 4.2 million Turkish users have now opted into its service following its commercial deal with TTNET, the country's largest Internet service, and that 'advertising requests from Turkish publishers' are now being received at a rate of more than 130 million per month. Initial results have been good, with targeted campaigns 'delivering on average more than 3 times the click through rates of current advertising performance'.

During the period, the firm raised £7m before expenses from placement of shares, but its £20 million fund raising in China has been delayed. It has also moved its domicile to Singapore in order to trade shares on CREST and improve liquidity.

The company says advances in Turkey are the fruit of its 'steadfast commitment to its proposition of ISP level behavioural targeting' and that it has learnt from every market that has gone before - these include Brazil, which is progressing but 'will be overshadowed by Turkey in the short term'; Romania, where it is 'waiting patiently' for commercial launch; China, where it is 'lab testing' the process of integration with a Chinese ISP; and its now-suspended operations in Korea and the UK. According to Phorm, 'our experience in the market so far continues to confirm our expectation that the Turkish market alone will be able to make the group profitable during the next financial year.'

CEO Kent Ertugrul comments: 'We are gratified that, after many years, our deployment in Turkey has finally given us the opportunity to demonstrate, at national scale, the value of our model to all participants in the ecosystem: consumers, content publishers and advertisers.' Business Development in Asia Pacific - led since January by former SAP exec Paul Sarkrzewski, continues apace and has made it 'ever more apparent', Phorm says, 'that our pipeline is both long and rich'.

With an accumulated deficit of more than $188m, both the apparently nerveless Ertugrul and his patient investors will certainly hope so. The sector's more cynical and pessimistic analysts have been associating the company with the word 'turkey' for a long time now: this one may come home to roost.

Web site: www.phorm.com .

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.

• Phorm
• All news
• MrWeb info