Communications and IT group Spescom's headline earnings fell to 10.4c a share in the year to 30 September from 80.4c the previous year.
Executive chairman Tony Farah attributes the fall mainly to tough market conditions in the first half, a sluggish local economy, accelerated investment in development for international markets and the establishment of offshore operations.
However, he is confident the coming financial year will see a significant improvement in the group's figures.
Turnover declined to R370.34 million from the previous year's R498.28 million, which Farah says is mainly due to discontinued operations. The group disposed of several non-core businesses during the year and will continue to do so in the future.
Operating profit fell from R55.2 million to R16.73 million.
After finance charges, investment income, losses from associated companies and an abnormal deduction of R25.25 million, a pre-tax loss of R17.25 million was incurred.
The abnormal items relate to write-offs and write-downs of various investments.
The group reported a loss for the year of R19.62 million. Cash resources declined to R56.18 million from a previous R63.45 million.
Farah says the first six months, for which a headline loss of 15.8c was reported, were extremely tough.
"Firstly, reductions in revenue from Telkom were extreme. This position improved dramatically in the second half of the financial year.
"Secondly, Y2K fears effectively froze government departmental spending for a period of over five months. Thirdly, the ongoing sluggish economy continues to impact on trading."
He adds that the group has transformed itself into one with a global presence, with operations in the UK, the US and SA.
Development expenditure has resulted in several contracts, including one with British Telecommunications worth about R1.2 billion.
"All of these contracts are as a direct result of the investment in our global strategy which we see as becoming the platform for Spescom's future growth," Farah says. He adds that he expects a significant improvement this year as the group "unlocks the value of its technologies in world markets".
Spescom's share closed at 260c on the JSE yesterday, 8c down from Wednesday's close.
Share
