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Argo Blockchain to refocus and cut costs in the face of difficult market conditions

The company, which has around £15mln in the bank, believes the strategic ‘pivot’ will see the business break even at the EBITDA level in the second half

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The Ethereum price has crashed from just under $1,000 dollars to just over $100 in the last year and was more than $1,300 a coin at its peak

Argo Blockchain PLC (LON:ARB) said it plans significant cost cuts and will mine cryptocurrencies for itself to weather “continuing difficult trading conditions”.

The company, which has around £15mln in the bank, believes the strategic ‘pivot’ will see the business break even at the EBITDA level in the second half.

READ: Argo Blockchain to add Bitcoin to mining platform

Argo was set up as a mining-as-as-service company, which allowed the general public to create virtual currencies such as Bitcoin Gold and Ethereum.

And in its latest update, it said it had seen better-than-expected growth in consumer accounts.

However, price pressure, as digital currencies have crashed, and market volatility have forced Argo to refocus.

It has now stopped accepting new subscriptions and is ending all mining-as-a-service (MaaS) contracts by April 1.

“The company is temporarily moving away from MaaS to mining directly for its own account,” investors were told.

Argo plans to cut overheads by 35%. So, with the redeployment of the mining infrastructure and capital and a “material reduction of input costs” from suppliers, the underlying business should be profitable.

Co-founder Mike Edwards said: "We are being proactive and strategic in light of the tough industry market conditions by taking swift action to cut costs and refocus our strategy.

"While it is disappointing to make this shift after delivering better-than-expected growth during our first six months as a consumer business, we need to be prudent and act decisively in order to ride out the downturn and be in a strong position when industry fundamentals improve."

Quick facts: Argo Blockchain Plc

Price: 7.4 GBX

LSE:ARB
Market: LSE
Market Cap: £21.74 m
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