Johannesburg, 08 Jun 2006
JSE-listed Spescom says it is expecting an improved full-year performance despite its headline loss for the first half of the year being bigger than a year before.
The group incurred a headline loss of R11.83 million for the six months to end-March, compared with a loss of R10.94 million for the same period a year previously.
A headline loss of 16.4c per share from continuing operations compares with a prior-year loss of 15.1c per share, restated to comply with international financial reporting standards.
This was on revenue of R96.34 million from continuing operations, down from R114.92 million previously.
CFO Jene Palmer says the lower revenue is the result of the deconsolidation of the US operation and the discontinuation of the test and measurement division.
"Traditionally, Spescom's first half has always been slower than the remaining fiscal half, but this year the pattern has been more pronounced," she says.
CEO Tony Farah blames the poor results on continued delays in the awarding of large contracts in all sectors, but most notably in telecoms.
Lead times
"The call centre division was subject to increased product lead times, which impacted on the first half-year performance," he adds. "Little movement was seen in the voice markets during the period under review.
"However, the second half is showing a steady increase in order intake and subsequent turnover. Although no longer consolidated, the US operation has produced two greatly improved quarters and has a healthier qualified pipeline going forward."
Palmer says while forecasting revenues is difficult, best estimates indicate an improved full-year performance. She attributes this to pipeline opportunities and orders on hand.
"However, the telecommunications arena is an example of the unpredictable nature of our business. Despite deregulation, this sector continues to be volatile. A conservative view of the market would be that revenues are only expected to begin flowing in 2007."
Palmer says all operations are expecting a better half. World Cup 2010 opportunities are expected to benefit the media division, while the telecoms division is poised to take advantage of expected market growth over the next five years.
The Spescom share, which closed 5c or 5.3% down at 90c on the JSE yesterday, was trading 9c or 10% lower at 81c early this morning.
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