Blur Group's shares plunge on 'substantially lower' revenues

Blur Group's share price tumbled by more than a quarter on Friday after the online marketplace for business services warned that its full-year revenues would be "substantially lower than previously expected".

The Aim-listed company, which only three months ago issued its third profit warning in the space of a year, has lost more than 90 per cent of its market value since January 2014.

In a trading update on Friday, Blur said that following discussions with its auditor, KPMG, it had determined that some of the projects started on its platform between late 2013 and early 2014 "have experienced delays" and have "shown a lower likelihood of completion".

As a result, Blur's recognised revenue for the full year will be "substantially lower" than previously expected, it said, without specifying its new revenue forecast.

Blur added that it and its auditors are in the process of dealing with inquiries from the Financial Reporting Council?, the UK corporate governance regulator, on how to recognise revenue from the historical contracts. This process "may impact the timing of the release of the results" for the year ending December 31 2014, the company said.

By late morning on Friday, Blur's share price was down 30 per cent at £56.25, giving the Exeter-based company a market capitalisation of just about £26m.

Blur provides an online marketplace where buyers and sellers of services such as web design can transact. It charges a commission on the value of each project transacted through its platform, though it only gets paid once a project reaches predetermined milestones, such as completion.

Anthony Miller, managing partner at Tech Market View, an industry analysis company, said: "Where Blur went wrong is by implicitly assuming the execution risk on the projects sold in the marketplace. In other words, Blur recognises revenues against agreed project milestones yet has no real control over the quality and timing of service delivery."

Philip Letts, Blur's chief executive, said: "Last year was a year of transition for Blur Group. Our focus during 2015 remains on growing the business to reach profitability in early 2016."

Blur said its net cash position "remains in line with expectations" at $17.4m as at December 31 2014.

Tintin Stormont, analyst at N+1Singer, warned that Blur's full-year loss is "likely to be larger than expected", although the final accounting treatment has not yet been determined.

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