The CEO of South West Bitcoin-focused firm The Smarter Web Company today insisted its ambition to build one of the UK’s leading companies remained unchanged despite slumping to a \u00a371m half-year pre-tax loss.<\/p>\n
The Bristol-based firm, among the leaders in adopting corporate Bitcoin payments, made an operating loss of \u00a32.7m in the six months to 30 April, which its CEO said period predominantly reflected one-off costs linked to its uplisting to the London Stock Exchange\u2019s main market.<\/p>\n
The firm made a \u00a3207,221 pre-tax loss in the equivalent period last year. Revenue for the half year just ended came in at just under \u00a3397,500.<\/p>\n
The reported loss of \u00a371.9m was almost entirely attributable to a non-cash accounting adjustment arising from the decline in the Bitcoin price during the period, chief executive officer Andrew Webley told shareholders in comments attached to its interim financial results.<\/p>\n
He said excluding these non-cash movements, the underlying performance of the business was in line with the board’s expectations.<\/p>\n
“It is worth reminding shareholders that Bitcoin is a volatile asset and that periods of challenging price action are a feature of its history rather than an exception to it,” he said.<\/p>\n
“Every material move higher has been accompanied by periods that test conviction, and the recent price environment is no different.<\/p>\n
“The directors remain confident in the long-term case for Bitcoin, supported by the material progress we are seeing in institutional adoption, regulatory acceptance and broader mainstream recognition. Our conviction in Bitcoin has never been stronger.<\/p>\n
\u201cThe board’s ambition remains unchanged: to build one of the UK’s leading companies, supported by a profitable and growing operating platform, a Bitcoin treasury that delivers long-term capital appreciation, and a disciplined approach to value creation for shareholders.”<\/p>\n
Webley said the half year had represented a period of significant progress across all areas of the business. <\/span><\/p>\n The group’s strategy is built on three equally important pillars – a profitable and growing operating business that generates recurring revenues; a Bitcoin treasury that provides long-term balance sheet strength and capital appreciation; and a disciplined acquisition programme through which we broaden and deepen the group’s operational platform. <\/span><\/p>\n Each pillar is designed to reinforce the others, and together they form the foundation of the group’s long-term strategy.<\/span><\/p>\n Webley said the \u00a31.69m acquisition of Nailsea-based Squarebird Agency in February marked an important step in the execution of that strategy. <\/span><\/p>\n “The group now operates two complementary digital agencies, The Smarter Web Company Operations Limited and Squarebird – both of which are profitable, growing and increasingly working together to win new business and deliver improved outcomes for clients,” he added.<\/span><\/p>\n The Bitcoin treasury was the cornerstone of the company’s balance sheet strategy, he said.<\/span><\/p>\n During the period, the firm’s Bitcoin holdings increased from 2,660 to 2,778, the holding on 30 April having a fair value of \u00a3157,123,888, representing 98% of total assets.<\/span><\/p>\n The fair value loss of \u00a370,820,026 reflected the decline in the Bitcoin price to approximately $76,300 (\u00a357,663) at 30 April.<\/span><\/p>\n In February the firm also entered into a $30m Bitcoin-backed credit facility with New York-based Coinbase Credit Inc., allowing it to access capital, secured against its Bitcoin holdings and is interest-bearing (6.75% to 7.25%) with no fixed maturity date. <\/span><\/p>\n By the period end, just over \u00a314.8m had been drawn under the facility, which the firm said <\/span>allowed it to complete several pre-IPO warrant purchase transactions and continue accumulating Bitcoin without additional equity dilution.\u00a0<\/span><\/p>\n Since the period end, the company has continued to accumulate Bitcoin, with 100 acquired at an average cost of approximately \u00a357,700, increasing its total holdings by 3.6% to 2,878.<\/span><\/p>\n Today it holds 2,878 Bitcoin acquired across 40 announced transactions at an average cost basis of \u00a380,950 each, representing a total cost of \u00a3232,973,110.<\/span><\/p>\n Formed in 2009 to specialise in creating bespoke, mobile friendly websites for small and medium, The Smarter Web Company describes itself as combining creativity, technical expertise and a results-driven mindset.<\/p>\n Just over two years ago it adopted a policy of accepting payment in Bitcoin, saying it believed the cryptocurrency would form a core part of the future of the global financial system.<\/p>\n Since then it has implemented a treasury strategy to build a balance sheet founded on Bitcoin and has raised millions of pounds through a number of new share issues.<\/p>\n <\/p>\n <\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" ‘Non-cash accounting adjustment’ came from the decline in Bitcoin’s value, says CEO<\/p>\n","protected":false},"author":272345,"featured_media":27383,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[127714,127685],"coauthors":[137101],"class_list":["post-42739","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-digital","category-financial-services","tag-bristol-and-bath","tag-featured-story","tag-south-west"],"yoast_head":"\n