Moshi Monsters firm Mind Candy has begun talks to extend the terms of a £6.5 million loan following a major financial slump.
In 2013, the company reported revenues of £30.6 million. Last year, that figure more than halved, dropping by 57 per cent to just £13.24 million, according to the company’s latest financials. (via The Guardian)
Chief among the drop-off was Mind Candy’s licensing arm, with merchandise sales plummeting from £12.8 million two years ago to under £3 million in 2014.
Subscriptions and membership cards were also hit hard, more than halving from £13.2 million in 2013 to £5.7 million last year.
However, its mobile division saw growth from zero to £2.1 million last year.
A spokesperson for the company said that the losses were partially due to ‘heavy investment’.
“As our financials show 2014 was a year of very heavy investment for Mind Candy with multiple teams developing a wide range of products and apps across all three of our brands: PopJam, World of Warriors and Moshi Monsters,” they said.
Following the announcement, Mind Candy revealed that it was renegotiating a £6.5 million loan it took out with Triplepoint last year.
The 12 per cent loan was originally set to be repaid by June 2017, beginning with an initial payment this July.
“The company has a good relationship with the lender and is in negotiations to delay the capital repayment start date,” the firm said in a statement.
“In the event that the negotiations are not successful, or that the company cannot generate sufficient revenues, then there exists a material uncertainty which may cast significant doubt over the company’s ability to continue as a going concern.”
Mind Candy COO Divinia Knowles departed the company last September, with its Brighton office closed two months later. Founder Michael Acton Smith has since been searching for a replacement.