LONDON (ShareCast) - (Sharecast News) - Forbidden Technologies' shares dived on Tuesday after the company reported that a jump in revenue failed to have an impact on annual losses, which deepened amid rising operating costs.
For the year ended 31 December the cloud video platform technology developer recorded a loss before tax of £2.6m, an increase of 10% compared to the year before, as operating costs increased by 12% to £2.7m due to increased investment in North America through higher ongoing customer-facing consulting fees, one-off severance costs, and one-off marketing costs relating to the rebranding and launch of Blackbird.

Meanwhile, revenue increased by 15% to £0.9m as deferred revenue increased by 57% to £0.2m after the company pushed to increase revenues from recurring infrastructure sales, which grew from just 28% last year to 53%.

Ian McDonough, chief executive of Forbidden, said: "2018 has been a year in which we have seen continuing success in the execution of our strategy to move to recurring infrastructure sales as the primary driver of growth. These sales now represent more than half of our invoiced sales, almost double the amount two years ago. This is a result of our focus on having Blackbird adopted as an integral component of our client's infrastructure. This approach has gained significant traction, especially in North America, where we have seen major contract wins including TownNews."

The "significant" six-figure deal with TownNews comes after Forbidden doubled the size of its North American business by strengthening its sales team, with the business now comprising 25% of total invoiced sales.

The AIM traded company said it is debt free and its cash and cash equivalents stood at £5.0m at 31 December, unchanged from the year before.

"We have started 2019 in a strong position with higher deferred revenue and contracted orders at the beginning of the year than last year. To date we are ahead of our invoiced sales figure recorded this time last year. The board is confident that our strategic focus and stronger sales capability, especially in North America, means we will continue to win new higher value business and grow revenue from our existing client base," said McDonough.

Forbidden Technologies' shares were down 12.89% at 6.75p at 1027 GMT.

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