Listed company Insig AI says it expects to be profitable earlier than previously forecast.
The London firm, which made its AIM debut in May 2021 following a reverse takeover of Catena Group, provides environmental, social and governance data solutions including an ESG disclosure research tool.
It now expects profitability from Q2 2023.
Over the last 12 months, the company has invested heavily to build a repository of machine learning ESG company disclosures on more than 2,500 global businesses.
Its database now includes constituents of the S&P 500, the STOXX 600 and the FTSE 100/250/350 together with hundreds of non-listed corporates.
“The company is confident that this repository can be utilised to deliver a long-term revenue stream,” it said.
“Having secured this capability, the company is now able to flex more of its costs based on orders received. Accordingly, the board has taken the decision to substantially reduce ongoing costs in relation to the building of the repository of disclosures and the integration of the data filings capabilities.
“The board now believes that no further working capital will be required to support the operations of the business in the short- and medium-term, as the business is expected to become cash flow positive from Q2 2023 as a result of the cost-cutting actions taken.”
However a sharp rise in borrowing costs, an unprecedented sell-off in UK index-linked government bonds, significant uncertainty and liquidity concerns in the pensions industry – sparked by former Chancellor Kwasi Kwarteng’s disastrous ‘mini-Budget’ – have had an impact.
“A number of contract wins were anticipated to close before the end of October [and we] won a contract with a value of £200,000,” it added.
“Given Insig AI’s focus on the asset management industry, [the market headwinds] resulted in a number of our prospects understandably prioritising dealing with the impact on their businesses of sudden market turmoil.
“As a result of this recent unexpected wave of uncertainty, a number of contracts within our pipeline did not close by 31st October; however, many of these remaining prospects remain active.”
CEO Colm McVeigh said: “With recent uncertainty in the asset management and funding markets having increased significantly, we must adapt and accelerate the timing of profitability.
“Whilst it would have been ideal to have continued to expand our coverage into more smaller companies, the return on this investment would extend beyond our appetite.
“We prefer to focus on becoming cash positive sooner, which we hope to achieve in Q2 2023.”