Shares in DA Group plunged almost 6% yesterday after the Scottish character animation software and services pioneer said it may be running out of money and that it might not survive much longer.
Shares in DA Group plunged almost 6% yesterday after the Scottish character animation software and services pioneer said it may be running out of money and that it might not survive much longer.
The AIM-listed company, which is based in Glasgow and had once been a Scottish technology high-flier, yesterday told the City there was now a "fundamental uncertainty over whether the company could continue as a going concern".
The company said it was "still in discussions with its bankers" over an invoice discounting facility.
DA Group, formerly known as Digital Animation, made its name by creating Ananova, the aquamarine-haired newsreader it eventually sold to Orange for £30m back in 2003.
In the heady days of the technology boom, the company's stock traded at around 400p a share. DA shares yesterday plunged 5.9%, or 0.25p, to 4p.
Its latest financial results reveal that its cash balance had plummeted to £136,000, as of the end of August, compared with £746,000 at March 31.
Nonetheless, during the past 18 months, DA has struck a string of deals through its Yomego entertainment division, most recently with commercial radio group GCap Media to develop listener platforms for user-generated content.
Last year, DA secured a three-year deal with Channel Five TV to provide an animated 3D version of cricket legend Geoff Boycott to deliver alerts and match updates via PC for coverage of England's home test matches and one-day internationals.
The company has also struck agreements with Endemol, Fremantle, MTV and Ladbrokes, to which it provided online betting odds and sports punditry via its animated character called Big Frank.
However, it has struggled to break through to profitability, and yesterday DA told the City there were challenges in maintaining a "sufficient level of working capital".
"The increased demand for our products and increase in total order value points to a sustainable business model being achieved," said DA chief executive Mike Antliff.
"However, it is also clear that historically the levels of business have not been sufficient to see us through to a position of bering cash positive and profitable at this time."
Antliff also said that since April the company had secured sales orders worth around £800,000. However, he warned that because of insufficient working capital it may not be able to take full advantage of these orders.
Yesterday's share price fall was the latest in DA's long, precipitous decline since May, when the firm lost 36% of its value after announcing it had appointed accounting firm Baker Tilly to help undertake a "strategic review", including the possibility of a sale.
The company has said it was "investigating the possibility that strategic partners may be interested in acquiring DA Group in order to enable the further development of the company through exploitation of the market opportunities available".
Antliff yesterday added: "We look forward to providing the market with further updates."
According to the DA's website, Dresdner Kleinwort Securities is the company's largest stakeholder with a 15.49% holding, followed by Antliff, who owns 12.86% of the firm.
Antliff has seen the value of his own holding tumble by around 85% to just £205,000 since the beginning of the year.
Nonethless, the company yesterday revealed narrower full-year pre-tax losses and a three-fold increase in sales.
Pre-tax losses came in at £1.6m for the year to the end of March, compared with a restated pre-tax loss of £1.9m previously.
However, turnover climbed to £642,558, compared with the £183,651 reported in the year-earlier period.
