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Wednesday, 5 July, 2000, 05:19 GMT 06:19 UK
Online business delays market float
Blackstar said market forces delayed float
Blackstar said market forces delayed float
by BBC Northern Ireland business editor James Kerr

A Belfast-based online video retailer has postponed plans for a floatation on the stock exchange.

Blackstar said in April it planned to float in a deal worth up to 200m.

The firm's owners said market conditions had necessitated a delay.

But they said that despite the delay the company had been able to raise another 6m from investors.

Blackstar has been one of Northern Ireland's noteable dot.com successes employing 100 people.

The company's marketing director, Jeremy Glover, told BBC News Online that they were not discouraged at having to delay.

'Confidence'

"Given market conditions the timetable for our IPO (initial public offering) had to change, but we think that our ability to raise 6m in current circumstances is a real vote of confidence in our business model," he said.

The decision was made against the background of a grim few months for e-commerce world-wide.

Hype about the potential to sell goods over the internet was followed by a harsh dose of reality, with a number of the big name dot.coms getting into trouble.

'Burn rate' falling

But the cash injection of 6m from existing and new investors has now put a value of 20m on Blackstar.

Its owners said the investment will see them through to the point where the company begins to make a profit.

That is expected to happen before the end of next year and it would mean management could pick their own time for a floatation.

Blackstar currently has sales of around 1m per month, and has just added an on-line cinema and television listings service to its site.

The company said that in particular the amount it is costing to attract new customers to the site is falling.

Those costs are a key element in the finances of dot.coms.

For Blackstar this means their "burn rate" - the speed with which they spend capital - is also falling.

Recently, the Sunday Times listed the company as 13th in a league of European e-commerce ventures.

That sort of exposure, and the ability to raise money in the present financial climate, suggests that Blackstar has a future - more than can be said for many others seeking to cash in on the dot.com revolution.

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See also:

05 Apr 00 | Northern Ireland
Online business to brave market
11 Jan 00 | Northern Ireland
Online retailer in 200m deal
19 Aug 99 | Northern Ireland
Internet video firm creates more jobs
11 Jan 00 | Business
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