Aqua Online Holdings is considering delisting from the JSE in the wake of significant full-year losses and weak prospects going forward.
The e-commerce enablement company sunk well into the red in the year to 30 June, incurring a pretax loss of R21.36 million compared with a R21.32 million profit the previous year.
The group warned at the release of its interim results in March that it would report a material headline loss for the full year.
The significance of the depression of its gaming profits resulting from its IMS software roll-out costs and underperformance of its e-gaming clients became apparent last night when it reported a headline loss of almost R11 million, reversing a previous profit of R21.84 million.
"Our performance was disappointing as anticipated," says CEO Brent Shahim.
He says the results were also affected by costs associated with the restructuring of the group, which included relocating international operations to SA and improving operational efficiency in the enablement business locally.
The online gaming market's growth slowed significantly after large US banks began regulating e-gaming credit card transactions, raising barriers to entry and forcing existing players to consolidate.
Shahim says the online gaming market's contraction affected Aqua's software distribution pipeline, making a short- to medium-term improvement in gaming unlikely.
He says a static e-services industry should sustain pressure on enablement margins going forward.
Aqua's financial performance is expected to remain under pressure given the trading environment and depressed revenues.
"We are therefore considering strategic alternatives which may include delisting Aqua and returning capital to shareholders in order to protect and maximise shareholder value," he says.
"We are currently looking at the significant expense associated with a listing and the impediment to raising capital and staff incentivisation set by our weak share price."
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