JSE-listed multinational technology group Spescom expects a significant improvement in its results for the six months to March.
Spescom's business is the provision of products and solutions to connect to the network economy, as well as information and knowledge management enterprise software.
The group incurred a loss of R85 million for the year to last September, although it said at the release of its results that the second half was profitable, but not enough to overcome first-half losses.
It says now that preliminary indications are that the improved performance in the second half of last year has continued into the first half of this financial year despite difficult economic and trading conditions.
In addition to foreign exchange gains resulting from the strengthening of the rand, the group attributes the improvement to various factors, including Spescom's globalisation strategy and its investment in technology development.
"Globally there is a notable increase in the value of business being generated from proprietary products," says financial director Hilton Isaacman. "During the current year at least 50% of group revenue is expected to be derived from international markets."
He says the positive trend in the interim period is expected to continue for the full year to end-September.
However, the group says the war in Iraq and continuing market uncertainties are having a delaying effect on buying decisions, making it difficult to forecast with accuracy the timing of new business.
Isaacman says the performance of the US operation has improved. "We expect it to achieve its projected full-year revenue growth of 50% on the previous financial year."
In SA all operations are generating positive cash flow. Several large long-term contracts are in the roll-out phase, including a remote network monitoring contract for Telkom.
He says the customer contract centre division in SA is expected to gain momentum in the second half of the year.
"The second half of the year should also see the voice transaction management channels to market in the US and Europe continuing to bear fruit, particularly with regard to the original equipment manufacturer distribution agreement recently signed with Dictaphone Corporation to market Spescom's voice recording products internationally."
The group's debt levels have also declined materially due to a stronger rand and improved cash flows generated from operations.
"Reducing and restructuring group debt remains a high priority," Isaacman says. "Various initiatives are being explored in this regard and discussions are taking place with Spescom's bankers with a view to agreeing to an acceptable repayment programme."
Spescom's share price on the JSE was unchanged at 43c in early morning trade.
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