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HOME arrow Computing arrow Plasmon's growth plans shake market confidence arrow Registration
Plasmon's growth plans shake market confidence
Written by Sam Fountain   
Friday, 08 February 2008
Shares in optical storage system provider, Plasmon have taken a sizable hit after the company announced an undervalued share placing, and deferred its cash-positive target.

The Melbourn-based company has announced a major growth strategy and proposed raising around £10m by way of a placing at 10p per share, a serious reduction in value, given that Plasmon's shares stood at triple that value just three months ago.

The firm said that it plans to use the cash to develop its customer-facing sales and service channel, and as a result of the investment is now deferring its cash break-even target to the second half of 2009.

The 100m share placing is expected to generate £10m before expenses, which aside from funding recruitment and investment in the customer-facing sales, will strengthen the company's intellectual property in the 'software solution layer' of Archive Appliance, and also fund the company's working capital requirements.

It said that in order to further increase its share of global archive storage revenues, estimated to grow from $9bn in 2007 to $23bn by 2010, it had accelerated the company's sales execution strategy, beginning with the appointment of new CEO, Steven Murphy last year.

It also said that it expects a major programme of operational restructuring, which has already reduced its overheads by 17 per cent, will have reduced headcount by 25 per cent when the outsourcing of hardware manufacturing is concluded in June.

"The board and I are delighted with the impact Steven Murphy has made in the last 2 months," said chairman, Rod Powell. "His experience and skills are exactly what the Company needs to turn its technology leadership into market leadership."

The market has responded poorly to the news, with shares falling 1p to 11p on the day after showing prices of 33p in November.
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