Affinity revenues up as losses widen
Unmetered Net access fails to take-off
Affinity Internet has reported widening losses today amidst a sharp increase in turnover.
For the six months to June 30 the UK-based Internet and telecoms company posted pre-tax losses up three-fold from £3.4 million in H1 2000 to £14.9 million in H12001.
Turnover shot up 250 per cent to £15.8 million in H1 2001 from £4.5 million during the corresponding period last year.
In a statement, chairman Terry Plummer said: "Despite a challenging economic environment, the board are delighted to report demand for Affinity's services is continuing to grow at a higher than predicted rate."
Affinity had expected strong demand for unmetered packages following the launch of an unmetered (FRIACO) narrowband service. And the company invested heavily in rolling out the product. But so far, it has failed to see any sizeable take-up, and consequently, revenues for its Internet division were flat in the first half.
Affinity, a white-label ISP for customers including WHSmith Online and the Prudential, admitted that it failed to meet its Q1 forecast that 25 per cent of its customers would migrate to a FRIACO-based service but remains hopeful this will improve later this year. When it does, Affinity claims margins will improve for its Internet business.
The company has cash reserves of £8 million following a £5 million injection from Powergen earlier this month. This was a second tranche payment from the utility company in respect of Hurricaneseye, a co-owned unified billing service, which is performing above expectations. ®