Ixchange, the JSE-listed global software company, today reported that its FrontRange Solutions division was on track to turn in revenues for the six months to end-December of R330-million, a 50% improvement on the same period in the previous year, at current exchange rates.
Presenting the first quarterly briefing on FrontRange Solutions, Chairman and CEO Dana Buys said that with total cash resources of more than $70-million, the US-based division is well positioned to execute on its stated strategy.
Says Buys: "This investment has been primarily in marketing, and research and development. In the first quarter to end-September 2000, FrontRange Solutions boosted significantly its investment in marketing from 19% to 31%, compared to the first quarter of the previous financial year. We also more than doubled research and development spending to 16% of revenue, compared to 7,4% in the same period the previous year."
Buys says significant progress has been made in building strategic partnerships which will enhance FrontRange Solutions` leadership position in the market for small business applications. Recent agreements with Sales.com, 60% owned by CRM industry giant Siebel Systems, and Peregrine Systems will consolidate the leadership positions of the GoldMine and HEAT applications respectively.
"Our investments in e-commerce, through Maestro, as well as our investments in Europe are starting to deliver returns. Operations in France and Germany are running ahead of expectations. The UK operation now has a full pipeline after a slow first quarter," he says.
During the first quarter, GoldMine 5.0 received the PC Magazine Editor`s Choice award for the fifth consecutive year. "Awards are not an end in themselves, but do serve as milestones of our continuing high standards and progress," says Buys.
He says that overall revenue performance of FrontRange Solutions in the first quarter was lagging budget by 12%. Current indications are that the division remains on track to meet its targets for the first half of the year.
Progress is being made in executing the company`s stated strategy. "We will also be adding to our revenue stream through a focus on recurring services, particularly for the large base of GoldMine customers. This provides a source of annuity-type income. We expect the launch of subscription based services in the second half of fiscal 2001 to further improve our revenue performance," says Buys.
Buys says the company now expects that it could see the completion of its investments in the current financial year, rather than over two years. It is anticipated this strategy will lead to increased margins in fiscal 2002.
"The overall prospects for FrontRange Solutions remain very encouraging. We have in place a strategy on which we can deliver and are delivering; we have a solid base of over 100 000 customers and over one million users of GoldMine and HEAT; and we have the right partnerships and alliances with leaders," he says.
"For Ixchange, the prospect for local investors is a company with a strong business plan able to deliver strong growth in dollar terms, further enhanced by changes in the exchange rate. The growth of FrontRange`s midmarket space, although not currently as pronounced as that of the large corporate sector, is expected to follow."
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