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Proxama – amidst current attempted confetti issuance extraordinaire, “pleased to announce”…

By Steve Moore | Thursday 13 July 2017

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

Shares in Proxama (PROX) currently feature on today’s top gainers list on the back of a “Contract Renewal” announcement. Hmmm, what’s the detail here?

The company “is pleased to announce that a major North American bank has renewed its contract to use Proxama's location technology for a further 12 months”. It adds this “follows the success of the initial contract, and will generate further recurring revenue”, with Chief Executive John Kennedy considering it “significant for Proxama as it demonstrates our ability to work with leading brands to support major location campaigns in different geographies. The renewal of this contract is not only a testament to our product and services, but also evidence of the continued demand for location-based mobile services across the globe”.

Such words sound encouraging, but it is numbers which in the end matter – and recently announced results were dire and see it attempted “exciting transition” time and confetti issuance extraordinaire.

This sees a significant reliance on a 0.03p per share “open offer to raise up to approximately £4.1 million, on the basis of 17 open offer shares for every 3 existing ordinary shares held”. A useful time then to announce some ‘positive’ news – and the positive words of the “Contract Renewal” announcement look to have done the trick in that respect.

However, no financial information is provided - and I’d suggest further dire financial results from the company will follow, with results for the first half of 2017 required by the end of September. Ahead of those and clear evidence of “a significant new growth direction” the board reckon (Oops) “firmly believe” they are leading the business in, I retain this as a bargepole stock.

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