Scoot may bring in partner as funding runs low

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The Independent Online

Scoot, the troubled online directories business, said it was still considering its options including selling itself and bringing in a strategic partner as it warned that it did not have sufficient cash to meet its business plan for the next year.

Scoot, the troubled online directories business, said it was still considering its options including selling itself and bringing in a strategic partner as it warned that it did not have sufficient cash to meet its business plan for the next year.

While the group thought it could trade at least until the start of next month, it said it would be able to survive until May of next year once the £45m sale of is Loot business to Daily Mail and General Trust was completed on 1 October.

However, Scoot warned that if it could not find a buyer or strategic partner, it would have to weigh up whether it could operate on a standalone basis.

"If, based on this evaluation, the company does not believe it can achieve operating profitability within the foreseeable future, the directors will consider other options," it said.

Coupled with the strategic update were Scoot's six month ended 30 June results which showed the company plunging deeper into the red.

Pre-tax losses totalled £171.6m after a £112.7m provision for losses on disposals, mainly relating to the sale of Loot. It also took charges of £14.2m to cover losses at its former joint venture with Vivendi, a £19.9m charge to cover goodwill and a £5.5m charge to cover its restructuring codenamed 'project genesis'. In the same period last year, Scoot lost £15.6m. Sales for the six months came in at £19.4m up from £4.6m.

While the company, chaired by Dick Eyckel, said it believed its improved financial footing and an improvement in its technology would help improve underlying trading, it admitted there had been no material change since last month.

However, analysts at Equityinvestigator said they were "not optimistic that a buyer will emerge before Scoot is forced to file for bankruptcy" and continued to rate the shares a 'sell'. The stock closed down 0.05p at 1.35p last night.

"Given Scoot's mounting liabilities, any potential buyer would be unlikely to make a bid for the company's shares, even at the current low levels, but wait until the assets can be acquired for a nominal sum. The strategic partner option is unrealistic in our view since Scoot's need for cash is likely to deter any potential partner," the Equityinvestigator analysts said.

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