NetActive`s interim report for the six months ended October has revealed that the company will sell its dial-up subscriber base for almost five times its cost to the company.
The final price of the acquisition by M-Web will be determined by a subscriber audit in February, but NetActive is confident of a minimum price tag of R40 million. According to its statement, the cost of developing that base was just under R6 900 000. That is the amount that has been capitalised in anticipation of the sale.
The company showed a R34 million turnover in the six month period and suffered a R242 000 operating loss and a retained loss of R2 million. At the time of its listing last year, the company projected an operating loss of more than R2.5 million for 2000. The first profit is expected in April 2001.
NetActive dial-up and e-commerce director Jonathan Hackner says the dial-up subscriber business was started in 1996. Its growth since has been purely organic, with none of the now-commonplace subscriber acquisitions. How was the cost kept so low in comparison with the value M-Web sees in the subscribers? "We didn`t have expensive marketing campaigns and promotions," Hackner says.
M-Web announced in early January that it intends to buy the NetActive subscribers for cash. A R2 million deposit has already been paid, and the balance of payment will depend on the number of individuals a subscriber audit determines. NetActive claimed 35 000 in October, with monthly growth of 3 000 more.
Related stories:
NetActive subscribers to M-Web
NetActive exceeds 35 000 subscriber mark
Share
