M-Web is still deeply in the red two-and-a-half years after launching. Unfazed by its R302 million operating loss, the company says it will continue to operate at the current levels for the next year.
The listed Internet service provider posted revenue for the year to March 2000 of R227.3 million, an increase of 96% on the previous year. Gross margins increased from 31% to 49%. However, operating costs for the year grew from R275 million to R414 million.
M-Web finished the 12 months under review with a headline loss per share of 83.6c compared with 62.4c at the end of the 1999 financial year.
The board says the company will "continue to invest at present levels to grow the business, and will continue to incur substantial losses as a result of development expenditure in building its subscriber base, portals and e-commerce platforms".
Operating costs include M-Web`s investment in skills, infrastructure, marketing and expanding the business, including a drive into Africa.
The management says it will focus on "driving down the business costs on a per-subscriber basis".
In November last year, industry analysts calculated that M-Web is spending roughly R1 600 to gain a new customer and profiting by only R1 400 per new subscriber.
M-Web is currently operating a 235 000-strong dial-up subscriber base and claims over 700 000 page impressions per month on the various Web sites it owns and operates.
Related stories:
M-Web stockpiles ahead of growth spurt
Share
