Easynet Group Plc, the UK Internet service provider which caught out unwary investors with its disastrous public offering last March, has spent the first half of this year chasing down new business, but growing revenue still hasn’t brought profits. Net losses for the six months to June 30 increased to 668,000 pounds from 242,000 pounds last year on revenue that rose nearly 300% to 2.5m pounds. The huge growth in revenue, which was up 62% on the preceding half year, was driven by an extra 1,500 corporate customers and a further 7,000 dial in customers since December. The new corporate strategy is to focus on value added services to the big corporates, where Easynet can squeeze out better margins and bring in some cash. The group still has 1.8m pounds in the bank to keep it afloat, and chairman David Rowe is ambitiously predicting a breakthrough into both profits and, more importantly, positive cash flow in the fourth quarter of this year. Easynet is still a very small fish in comparison with the wholesale consolidation occurring in this industry and Rowe says his company is still looking for opportunities to increase mass. But having spent 1.5m pounds in cash on the purchase of Technocom Plc in May (CI No 3,162) and with a poor performing share price, Easynet’s opportunities are looking limited. Having dropped as low as 38 pence last year on the poor interim results, the shares have rallied, but were down again on Tuesday by 4.5 pence to 79.5 pence, still below the March 1996 flotation price of 100 pence. No dividend has been proposed by the board.
