Blur Group Shares Suspended – Why We Aren’t Surprised

The services procurement marketplace firm, Blur Group, saw their shares suspended from the London AIM stock market recently at around 3p. That does not mean the firm has gone or is going bust, we should stress. But it is running out of money, is seeking further sources of funds, and was not able to announce its annual results on Friday 23rd as it should have.

The company said it had tried to raise new funds but that potential investors had demanded “onerous conditions which the board considered were not in the best interests of shareholders” and that it needed new funding in the next six weeks to keep it afloat.

We wrote about Blur back when it was on the rise (apparently) with a share price that amazingly hit 800p, back in 2014, valuing it at £400 million. That was crazy, and a huge regret for Jason Busch and I was that we didn’t “short” the shares at that point when we could see it was a stupid valuation – even if the business was viable, it was never worth that much. We covered the firm again as things started to go wrong during 2014.

The basic viability question rested on a couple of key questions. Would buyers, who advertised contract opportunities on the platform, be prepared to pay 20% of the purchase price to Blur, in return for Blur finding suppliers through a combination of their platform and some more hands-on work?  (Outsourced procurement services in effect.) We could really not believe that 20% was a sustainable fee that people would pay in the long term.

There were and are also questions about the CEO and founder, Philip Letts, who was behind a previous high-profile failed business – Beenz.com. About a year ago I was supposed to meet him but the PR people at the last minute told me that sadly he wasn’t available after all. He has had plenty of time though to write a book and launch his “venue” in Devon last week,  just as the company crashed towards the cliff edge.

And the firm has never been hesitant to tell procurement people (public sector in particular) about how bad a job we do, or publish endless articles on our profession written by people who know very little about procurement.  Oh, and their CFO went bankrupt (personally) a couple of years back which is … well, what can you say?

The firm has also regularly issued statements saying that some huge contract was just about to be signed. The classic was the “Welsh cycling team” for which Blur was going to raise millions. Never happened. That was the brainchild of Eifion Weinzweig who was apparently a “former professional cyclist” (according to the BBC no less). Interestingly, we cannot find any evidence of his professional career – if he is reading this, perhaps he can send the link to those results? (This suggests he might have been ranked 999th in the UK in 2007).

More recently, Blur told the market it was close to signing up a “Top 100 UK-based law firm” and a “Large UK county council - blur has successfully completed its first trial project for this customer and is engaged in discussions regarding a wider rollout of blur’s platform”. We would just LOVE to know who these were / are.

We’ll see what happens next anyway as the firm attempts to find a white knight or fairy godmother to step in and save it.

 

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