Shares in risk software vendor Raft International jumped in morning trading on the back of an upbeat trading update and news that the firm is up for sale.
Raft stock moved up 11.10% to 7.50 pence after the firm said it had embarked on "an active process of identifying potential acquisition or merger opportunities, and seeking additional business partners, some of whom may regard the company as a merger or acquisition opportunity for themselves".
Raft called off preliminary takeover talks with a potential suitor two years ago, after failing to agree a fair value for the company.
More recently, shares in the company fell to new yearly lows after it posted poor first half results in July, lowered second half guidance and warned that it would not be profitable this year.
The vendor said last month that it had agreed a deal with investment fund Brittany Capital Management that could lead to an injection of £1 million in working capital in return for a 23.2% stake in the company. Raft says the facility has not yet been drawn against and is available until August 2008. The company's cash balance at the end of August was £0.6 million.
In the latest update, Raft says it has taken steps to reduce its cost base and although it doesn't expect any impact on results this financial year, which ends on 31 October 2005, it does expect to enter its new financial year in a position of having a cost base which is largely covered by signed contracts and recurring revenues from existing customers.
The vendor says there has been particularly strong interest in its raft credit product and over recent weeks interest in the operational risk package raft radar has increased significantly as regulatory deadlines approach for Basel II. In August raft credit was selected by Norsk Hydro, a Fortune 500 energy company, bringing the total client base for the product up to 11. The vendor also secured a US distribution agreement for its raft radar product with Texas-based ROME Corporation.
Earlier this month Raft also inked a EUR5 million deal with an un-named Nordic financial services group for the supply of IT and business consultancy services over the next three years.
The company says its prospective client pipeline "is stronger than at this time last year".