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Listed Web companies struggle to make profit
- — 18 November, 1999 21:49
Most new publicly listed online ventures in Australia have failed to produce profits over the past year, according to an industry report.
The first Deloitte Internet Profit Report reveals that although most Internet-based companies have reached their revenue targets over the past 12 months, marketing costs have placed online budgets under significant pressure.
The Deloitte Internet Profit Report looked at the forecasts and projections of 11 Web companies that listed on the ASX over the past 12 months.
The report found that four of six of the companies had achieved their revenue targets. Five were yet to report their first year's results.
Deloitte corporate finance national leader, Vincent Sweeney, said the report highlighted the difficulties involved in developing forecasts for a growing company in a fast-developing industry with little empirical data.
"It is of interest that of those companies that have reported actual results, most have achieved their revenue targets, but appear to have underestimated the costs in achieving their revenue streams," Sweeney said.
The companies involved in the report, including LibertyOne, Travel.com.au, ecorp, Swish, Reckon, Spike, 131Shop.com.au, HWW, EISA, ISIS Communications and Health Communications Network, all predict continued growth for the coming year. HWW estimates a growth rate of four per cent, while LibertyOne predicts growth to reach a massive 350 per cent over the next 12 months. Several of the other companies involved in the report are also confident their growth rates will be in excess of 100 per cent over the next year.