Storage company Maxtec has been hurt by a competitive trading environment driven partly by various original IT equipment manufacturers entering the storage solutions market with branded hardware.
<B>Salient figures</B>
Maxtec results for the year to 31 August 2002.
Previous year`s figures in parentheses:
Revenue: R92.85m (R117.82m)
Continuing operations: R79.4m (R91.16m)
Operating profit: -R12.02m (-R8.98m)
Continuing operations: -R13.56m (-R5.97m)
Profit before tax: -R11.33m (-R13.05m)
Net profit after tax: -R7.45m (-R10.27m)
HEPS: -9.3c (-7.2c)
Cash generated from operations: R701 000 (-R5.38m)
Current assets: R27.46m (R30.93m)
Cash resources: (R226 000) (--)
Current liabilities: R19.99m (R20.79m)
NAV per share: 17.46c (25.9c)
The group reported a headline loss of R8.19 million for the year to 31 August, translating to a 9.3c headline loss per share.
Contributing to the figures was the disposal of Maxtec`s investment in an associated company and certain subsidiaries.
"Due to low levels of business confidence and the rand`s deteriorating buying power, corporate IT spend has tapered down," says executive chairman George Talbot.
Revenue fell by 21.2% while the operating loss increased by 33.9%.
The group`s net loss after tax improved to R7.45 million from a previous R10.27 million loss.
Talbot says the future of the continuing operations has been greatly improved as a result of the group`s restructure and a reduction in borrowings.
Maxtec has concentrated its efforts on rebuilding its distribution channel and confidence is growing that resellers will seek out the company as a preferred supply partner as the demand-side for IT infrastructure improves.
"It is unlikely that the company will turn in a profit over the current six-month operating period, which includes the historically lower trading months of December and January," Talbot says.
"Management is optimistic that the company will return to profitability based on changes effected during the past financial year coupled with hard work and improved trading conditions.
"With the rand strengthening, business confidence may recover to such an extent that we may see an upswing in corporate IT spend over the coming months."
Talbot says the disposal of non-core local authority division Maxtec Global Support Services had a minimal effect on Maxtec`s net asset value, since goodwill relating to the initial acquisition had been written off in full against the share premium in prior years.
Maxtec also disposed of its 20% equity interest in associated company Sagitta Performance Systems, raising almost R7 million net, enabling the recapitalisation of its local operations.
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