WANdisco more than doubles first-half loss

Cloud computing company WANdisco, one of the UK's highest-profile young technology groups, more than doubled its pre-tax loss in the first half of the year, as it struggled to sell its big data technology to risk-averse corporate clients.

Shares were down more than 7 per cent on Thursday morning. WANdisco's revenues rose 43 per cent to $5m - up from $3.5m in the first half of 2013. But pre-tax losses rose from $7.5m to $18.5m. The group spent $4.2m on investing in new products in the first half of the year.

WANdisco, which is jointly headquartered in Sheffield and California, makes most of its money from selling software that lets people work collaboratively and in real time on documents and programs that are stored across a network of computers in the cloud.

Earlier this year it launched a new "big data" product that is aimed at helping companies analyse the masses of data they collect to gain insights and generate predictions about their businesses.

But while the global market for so-called "analytics" was worth around $14.4bn in 2013, according to research group Gartner, growth has been held back as many companies are unsure how to apply the technology.

WANdisco has signed partnerships with Cloudera and Hortonworks, the two big suppliers of open-source database software that sits behind companies such as Facebook, to distribute its product.

Subscriptions for WANdisco's big data business stood at only $300,000 for the first half of 2014, a fraction of the total $7.4m that customers agreed to pay in the period.

Existing clients include the hospital at the University of California Irvine and British Gas. WANdisco is also running trials with a government programme that is trying to slow the spread of pandemics by analysing health, environment and supply chain data, as well as a major UK retail bank and a supplier of jet engines and automotive parts.

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More than 90 per cent of the group's revenues come from North America.

Shares in WANdisco have lost two-thirds of their value since February, partly the result of a global sell-off of tech and cloud computing stocks earlier in the year. It recently secured a $10m revolving credit facility with HSBC to boost its capital base.

George O'Connor, analyst at Panmure Gordon, put the shares under review earlier in the year, citing concerns about "cash burn and plans to address this, unplanned staff attrition, and WANdisco's ability to execute given the current softening environment".

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