Junior market entertainment companies, KLE Group and C2W Music continue to burn cash with relatively large losses in the in the quarter and six months to June with one having shredded shareholders capital and the other on the edge of doing so.
C2W Music reported revenues of just US$4,976 in the June quarter and US$6,028 for the half year but cost rose in the quarter over that of 2014 with US$16,000 versus $12,193 and for the half year US$28,866 versus US$93,605. Finance cost ended at US$1,381 for the quarter and US$2,762 for the year to June. The company reported a loss of US$12,297 and for the six months and US$25,649 in 2014.
The cash burn for the company has virtually wiped out the share capital with only US$17,402 left out of US$1,286,619 raised when it went public, forcing them to seek loan funding which amounted to US$80,950 at June. The results are well off track from what investors were promised when the company had its IPO.
Over at KLE Group the focus is said to be on cost containment and the launching of franchising of the Tracks and Records concept as well as some new income stream.
For the quarter to June revenues amounts to $54 million with a loss of$12.85 million versus $8.3 million in 2014. For the six months, revenues was $103 million compared with $128 million with losses of $34.6 million and $20.9 million in 2014.
The company has burn through all the equity is raised and more and ended up with negative equity of $10.56 million at June and borrowings of $99 million. While borrowings have grown and payables have fallen from $116 million in June 2014 to $84 million, the composition of the amount tells the story of a company with serious challenges, with GCT due of $7.34 million versus just $146,000 in 2014 and Statutory payables of $10.7 million up from $2.3 million in June 2014 and credit card payables of $9.8 million, at the end of last year June the amount was at $7.2 million.
The lack of capital is driving the nail in the coffins of both companies as revenues are just not there at least currently, to allow for survival.