Concerns about the amount of time workers in the United States spend surfing the net produced bumper sales yesterday for software snooper specialist SurfControl.
The company, whose software monitors which websites employees are visiting and allows managers to restrict access, said the trend for staff to surf while they work had boosted its bottom line.
According to Steve Purdham, chief executive of SurfControl, the company has been successful in America because of the growth of internet terminals in offices.
He said that for a company with a thousand employees, each surfing the web for one hour a day, the cost is $35m (£23m) a year. "This is about 12.5% of the salary bill," Mr Purdham explains. "[Our software] allows the company to set up rules [for internet use]."
Sales last year grew by more than 110% in the year to $14.3m. About 90% of revenue came last year from the US.
The company, which is based in Cheshire, expects sales to rise as web use increases across Europe. Robert Barrow, the group executive officer, said: "Our market is a burgeoning one in the US, with the UK catching up, and mainland Europe will come soon."
Despite the optimism, the company reported a full year loss before tax of $24.9m against $2.1m last year. The loss includes write-offs from goodwill and provision for tax on share options. Deutsche Bank, the house broker, is predicting profitability in late 2002 or early 2003.
Cash balances at the end of the period were $32m, while fourth-quarter revenues leapt 614% to $3.9m from $0.5m.
The company said the cost of marketing and sales were the main drag on the post goodwill losses, but they were due to expenditure on infrastructure necessary for expansion.
SurfControl now has seven worldwide offices - two in the US, two in Britain, and one in Rotterdam, Frankfurt and Vienna and does not expect marketing and sales costs to slow down next year.
"Its all about getting market presence," says Mr Purdham. "SurfControl goes into markets that are ready for the product rather than educating the market."
The company has also increased its staff by 285% and now has 293 employees. It plans to build on this growth through an "aggressive" acquisition strategy to build market share.
SurfControl, formerly called JSB Software, recently acquired Austrian company CSM Security Management, provider of web content and email filtering software, and Cybercontrol from Mattel. The share price closed yesterday up 50p at £20.
• Shares in Patsystems, the software company that floated in March, tumbled despite a more than threefold rise in first-half sales as it reported wider losses. The shares were down more than 5% or 9p at 150p by the end of play yesterday.
Losses increased to £3.8m in the six months to June 30 from £0.58m a year earlier, which the company said was due to investment targeted at accelerated software development, increased customer support, strengthened sales and marketing and wider global coverage.
The company posted revenues of £1.1m, up 304% percent. It said its number of clients had risen to 20 from six and billable end-users to 488 from 177 at the same point last year.
