Another year, another set of opaque accounts from What3Words. Why do I say opaque? Because despite quite a few years of reading company accounts I feel that I must be missing something when I read through these accounts.
The headline info is clear:
- Turnover doubled to £2.15m
- Losses reduced from £16.5m last year to £10.6m
- Net assets of £15.6m (slightly down on last year)
- Investment received in the year £7.9m
- Employees reduced by 36 to 92
The cumulative position is eye watering, since its formation w3w has accumulated £146m of losses and taken on £160m of investment,
The directors consider w3w to be a “going concern” and it looks as if it can sustain another year or so of losses with a bit of shareholder support but unless major revenues start to materialise then at some stage a major cost reduction program will be needed or ..?
I don’t understand how this works, the company continues to lose sums that are many times it’s revenue and yet investors continue to support the business presumably because they have insight into the future upside that will come from a massive upturn in revenues or a golden clad purchaser who will confer unicorn status on the company.
maybe.maybe.maybe
Maybe I am an old fashioned entrepreneur who fussed too much about costs and revenues.
Maybe this all works out brilliantly and the company is on the verge of becoming an outstanding success, as the directors say in acknowledging risk “The group has created a new addressing format, with the aim of becoming a universal standard for location referencing. A key aspect of this is acquiring and retaining a high volume of newly engaged consumers, creating wide-scale network effects and consumer behaviour change to ultimately deliver commercial contracts.”
On the other hand, maybe we will look back on this saga in a couple of years and wonder how we could possibly have believed that it would ever make money. Well I won’t be doing that!
