JSE-listed FrontRange, the holding company for American customer relationship management (CRM) provider FrontRange Solutions, says it has achieved a promised turnaround despite recording a R252 million loss for the year to end-June.
In announcing its results for the period yesterday, the company was cautiously optimistic about its prospects, despite a looming challenge from one of the largest software companies in the world.
FrontRange says it slashed its losses to R43 million in the second half and more than halved its total loss for the year compared with the more than R600 million it lost in 2000/2001.
The headline loss for the year was R164 million, a 39% improvement on the previous year, which translates into a 104.52c headline loss per share.
"The turnaround was achieved in spite of tough conditions in the world economy," the company says.
FrontRange says 67% of its R807 million in revenue was derived from North America and a further 31% from European and Asia-Pacific sales.
The revenue figure is up 22% from R662 million in the previous year, but in dollar terms revenue declined 8%. FrontRange blames tough conditions for the drop but points out that its peers felt greater pain.
Although the group saw a net cash outflow of R70 million during the year, it reported more than R120 million in remaining cash and equivalents. The company previously announced plans to raise further capital to "fund potentially higher growth" and says it still intends doing so although it considers the available cash sufficient to fund operations during 2003.
The group is not overly optimistic about prospects for the next year, saying it does not expect an improvement in the world economy soon. However, with the launch of new software scheduled during the remainder of 2002, it predicts "a modest profit and positive cash flows overall for the year ahead".
Besides launching new versions of its existing CRM products, FrontRange is also to release the first of a new generation of software, based on the Microsoft .Net platform, during September.
Yet Microsoft could prove to be its biggest competitor in the near future. In February, the behemoth announced it would move aggressively into CRM and named FrontRange flagship product Goldmine as a key competitor.
FrontRange has renewed the cautionary notice issued in July but has dismissed speculation that it faces a possible takeover bid from Microsoft.
Its shares, which have been trading steadily around the 200c mark, lost 7.5% or 15c in morning trade.
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