Broker and insurance technology group Ensurance’s losses deepened in the half-year to December 31, due mainly to higher running costs, including expenses to build its European business.

First-half net losses more than tripled to $2.11 million from $588,000 in the corresponding period of 2015, despite a 12.58% rise in revenue to $1.6 million.

Business development outlays increased to $445,743 from $249,558, hiring costs grew to $2.27 million from $1.5 million and spending on computers and communications nearly tripled to $284,163.

Working capital deficit grew to $1.64 million from $1.09 million at June 30.

The company says it is on a strong footing despite the loss, and the investments required to grow the business – including in the huge European market – will take time to yield returns.

“Absolutely Ensurance is a viable company now, in 12 months and into the future,” MD Stefan Hicks told insuranceNEWS.com.au.

“We are extremely happy with the progress and position Ensurance is in with respect to its budgets and finances.”

He says investors in the company “know exactly what our strategies are, and the cost and time required to execute them”.

“As Ensurance is not only the IT developer of innovated solutions and products, but also the entity that is managing the sales transaction, it will naturally take time for the sales to catch up to our current level of investment.”

In the earnings report auditor Mazars Risk & Assurance says the company’s viability as a going concern will depend on its ability to generate sufficient working capital either by increasing operating cashflows or generation of sufficient additional capital.

“The group has incurred losses from operations and realised a net working capital deficiency at the half-year ended December 31,” the auditor says.

“These conditions, along with other matters contemplated… indicate the existence of a material uncertainty, which may cast significant doubt about the ability of the group to continue as a going concern, and therefore the group may be unable to realise its assets and discharge its liabilities in the normal course of business, and at the amounts stated in the financial report.”

Mr Hicks says the company’s capital-raising exercise is in “advanced stages” and progressing satisfactorily. Ensurance announced last year it is raising $3 million via a convertible note placement to fund its expansion plans.