FrontRange, formerly Ixchange, says it will continue as a going concern, despite reporting a 47% worsening in its headline loss per share for the half-year to 31 December 2001.
MD Dana Buys says the group has continued to take steps to restore profitability, resulting in monthly cost savings of $3 million achieved by January this year, compared with the period 12 months earlier.
<B>Salient figures</B>
FrontRange results for the six months to 31 December 2001
Figures for the year-earlier period in parentheses:
Revenue: R373.04m (R351.34m)
Loss from operations: R144.4m (R161.01m)
Goodwill amortisation: R15.26m (R43.9m)
Loss before tax: R205.33m (R185.47m)
Attributable loss: R181.88m (R148.36m)
Headline loss: R154.95m (R104.46m)
HEPS: -87.85c (-66.46c)
Current liabilities: R366.51m (R227.79m)
Current assets: R418.71m (R707.56m)
Cash and equivalents: R132.11m (R480.14m)
NTAV per share: 90.21c (349.92c)
Cash utilised by operations: R57.39m (R70.37m)
He says that, based on the expense saving, the R132 million cash on hand at December 2001 and a plan to raise additional funds to boost its currently ungeared balance sheet, the board is "satisfied that FrontRange will continue as a going concern for the foreseeable future".
The group recently disposed of all operations deemed non-core, leaving it with its 84% shareholding in US-based FrontRange Solutions.
Revenue from continued operations was down 6% in dollar terms from the previous interim period.
"Markets have remained depressed following the 11 September attacks, with longer than anticipated selling cycles being experienced in the US, UK and Australia," Buys says.
"The exception to this was continental Europe where targets were achieved and growth of more than 100% over the prior year recorded. Despite the decline in revenues experienced, the company continued to outperform its peer group in the global markets."
Almost 98% of total revenue was generated outside of SA, with 66% of revenue from North America and 32% from Europe and the Asia-Pacific region.
Buys says the group has decided to raise additional cash to take advantage of market opportunities and a potential economic upturn predicted for the latter part of this calendar year.
A US-based investment banker has been retained to manage the capital-raising process.
"FrontRange expects the world economy to remain tough during the rest of the current fiscal year.
"It has thus been reducing expenses and is budgeting for operational breakeven in the third quarter ending 31 March 2002 and a full quarter`s profit in the fourth quarter ending 30 June 2002.
"This should result in an overall operational profit for the second half of the fiscal year."
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