Baltimore Technologies, the internet security firm, yesterday disclosed the depth of its troubles when it reported a half-year loss of £550m and announced plans for a further wave of job cuts and sell-offs.
The company, one of the stars of the dot.com boom, outlined a wide-ranging overhaul of the business designed to put it back on a path toward profitability and restore investors' shaken confidence.
Staff numbers, which peaked at 1,400 in March, will be cut to just 470. "We want to recapture the original entrepreneurial spirit of the company," said chief financial officer Paul Sanders. "This marks a very important day for Baltimore and to a large extent a new beginning."
The decline of Baltimore which for a short while occupied a place in the FTSE 100 is yet another example of the reversal in fortunes in the internet sector. The Irish company's market value has fallen from £5.5bn at its peak to around £115m. Its shares, touching £13.75 in its heyday, have fallen by 98pc. Fran Rooney, the former chief executive, quit the company last month.
Baltimore announced 250 job losses in May and a further 220, chiefly in the US, will be lost immediately. The bulk of the remainder earmarked to leave the group will be as a result of divestments.
The company will delist from the Nasdaq market at the end of September to save £2m a year. The job losses and other cost-cutting measures are aimed at saving £72m a year.
In a humiliating u-turn, Baltimore has hoisted the for sale sign over Content Technologies, the US software business it paid almost £700m for last October. Analysts have put a value on the business, which produces the MIMEsweeper email security system, of between £50m and £70m.
The losses for the first half include a write-down of £393.8m, against five acquisitions it made last year, the largest of which was the Content deal.
Mr Sanders said Baltimore had to make a decision on where to make its investment. The firm intends to refocus on its core internet authorisation and authentication business. "We do strongly believe in the viability of both businesses but we are acknowledging we can't do both of them justice due to limited resources," he said. "We are looking at divestment of the MIMEsweeper business unit, but I would stress it is not a fire sale."Mr Sanders admitted the company had lost its reputation for being innovative because its resources were over-stretched. Other smaller non-core assets are also likely to be sold.
The plans should be enough to deaden the constant murmurs about the financial viability of Baltimore. The cost savings and divestments would provide sufficient funding to see it through to profitability without further recourse to investors, he said.
Revenues during the first half reached £39.4m, up from £25.7m in the same period last year. Baltimore shares climbed 1.5p to 23.75p.
