Outsourcery bosses give up salaries to raise working cash

London-listed cloud player raises £4.5m and sets sights on reaching break-even rate next year

Outsourcery's co-chief executives will both forego a year's salary as part of £4.5m financing boost that the company hopes will allow it achieve a "monthly run-rate break-even" position next year.

Piers Linney and Simon Newton, the joint leaders of the London-listed cloud firm, will both give up their remuneration package in a move that the firm claims will swell its coffers to the tune of £519,898.

Also part of the financing package is the conditional placing of almost 7.7 million ordinary shares at 20 pence each, which is intended to raise £1.5m. An additional £1.5m will be generated by a rejig of Outsourcery's arrangements with its debt providers. A "reschedule" of the agreements will "generate free cash flow of £1.5m", the company claimed in a statement to the markets today. The final £1m of the package will be achieved through a reduction of costs by way of an "organisational restructure".

Since its IPO in May 2013, Outsourcery has posted heavy losses, with today's statement confirming that its post-tax losses for the six months to 30 June stood at £3.6m on revenue of £3.5m. But today's statement reiterated the firm's belief that it is "establishing itself as the leading independent cloud services provider in the UK".

"The directors believe that Outsourcery's differentiation is now better understood as its partners go to market and win business against traditional delivery models. Outsourcery remains focused on moving the large installed base of Microsoft software currently running on servers in end customers' premises or via a traditional managed service arrangement to the cloud, which represents a significant revenue opportunity," added the statement.

"The directors believe that the work done to date to build out the group's cloud services offering and its channel partner network has positioned Outsourcery to capitalise on this trend. The directors believe that Outsourcery's time-to-market advantage, investment and expertise in creating, selling and supporting cloud-based solutions is creating a strong proposition for Outsourcery compared to its nearest competitors."