Term deposit and cash management marketplace Cashwerkz is betting that diversification into bonds and other products will deliver a higher margin than the company is currently earning and get it out of a chronic cash flow crunch.

Cashwerkz lost A$7.35 million in the year to June, compared with a loss of $7.31 million in 2018/19.

Revenue for the year was $1.3 million – up from $1.1 million the previous year. The company said the “flat result” reflected delays in “the onboarding and conversion of pipeline opportunities during the year, as well as market conditions generally”.

The company suffered a net operating cash outflow of $5.5 million, compared with an outflow of $5 million the previous year.

At June 30 it had cash and cash equivalents of $4.2 million.

Cashwerkz was launched in 2016 as an investment platform that allows institutional and retail investors to switch between term deposit and at-call account providers without having to verify their identity each time they move their accounts.

It has more than 50 banks on its platform and at the end of December it had $1.08 billion of investor balances on which it was earning commission. It did not provide an update in the latest financial report.

The company’s problem is that its current business provides very low margin returns. According to the financial report: “The retail cash and term deposit products have historically offered 5 to 10 basis points in commission, with wholesale earning 3 to 5 bps.

To address this the company has launched a new service offering bonds and other fixed income products to wholesale investors and financial advisers.

According to the financial report fixed income products offer margins in the range of 55 to 200 bps.