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Topjobs confident despite stock downgrade - 11/2000

John McNeil speaks to Online Recruitment

Johanna Cordery contacted John McNeil, Head of Communications at Topjobs.net, regarding rumours of downgraded shareprices. This is what he had to say: It is true that the analyst at Ladenburg Thalmann, which was the lead manager on our IPO, down-graded our stock. The revised rating was based on his assessment of our projected monthly cash-burn rate, measured against the net proceeds secured from the IPO, which was approximately $35 million, some 18 months ago. We are not aware of any corporate development that could have triggered the revised grade, and can only conclude that in a bear market different people respond differently, including the possibility of knee-jerk reactions.

That being said, cash is king and we required additional capital to grow the business into new European country markets. To do this, we were poised to return to the public equity markets in March of this year, when our stock was just under $20, at a time where we had out-performed the Nasdaq NM for a sustained period. We then had to postpone the new offering when the markets underwent a severe correction. We then switched to raising capital through private equity channels, but to date have not found terms that we believe would be acceptable to our shareholders, to whom we are obligated to deliver value.

As such, in July past, we developed and adopted a new 'core' business plan, which effectively meant that we consolidated our existing business to focus on our core country operations, namely the UK, Ireland, Switzerland, Sweden and Norway. The consolidation allows us to continue to grow the business, but within some self-imposed limits, and survive with our existing cash. To achieve this, we withdrew support for marginal operations, by selling our assets in our Australian operation, and reducing our corporate overhead, by amalgamating the CEO and COO roles, as well as combining the roles of the CFO and group financial controller.
On the basis of our plan of concentrating exclusively on our core country operations, we reported at the end of the last quarter that we anticipate that the group will become cash flow positive by the quarter ended June 30, 2001, with profitability expected at the close of the fiscal year ended March 31, 2002. Going forward, we continue to seek additional financing and strategic partners, as this will both strengthen the core plan and permit us to evaluate possible expansion into new European territories where the fundamental are most favourable for our business.

The business model is strong; our products continue to set us apart from many others in the same space, and we remain fully committed to delivering the high levels of service that our customers and job seekers seek and deserve.

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