Spescom year-end results 2002

Year-end results for multi-national technology innovator, Spescom Limited, reveal a notable improvement for the second fiscal half.

As previously indicated by the ICT group, the poor performance reported at interim stage has had a negative impact on the full year results.

The company generated a R3.6 million headline profit in the second six months of the financial year, as compared to the headline loss of R68.5 million reported at interim stage.

Revenues for the year at R366 million are depressed when compared with R489 million for the same period in 2001. The headline loss for the year, at R64.9 million, translating to 111c per share, is significantly down on last year's profit of 31.9c per share.

After taking into account abnormal items relating to amortisation of goodwill and losses incurred on discontinued businesses, the group incurred a loss for the year of R85 million, compared to a profit of R25.4 million for the corresponding period last year.

According to Spescom's executive chairman, Tony Farah, the positive trend reflected in the second half is expected to continue into the new financial year.

"The most notable outcome of this tough period is the emergence of Spescom as a truly multi-national group with a Nasdaq listing, operations in US, UK and SA, and channels to markets throughout the world. This growth and transformation has been achieved organically and most significantly, through the development of the group's proprietary technology," says Farah.

He notes that the group's SA operations have been consolidated and are anticipated to be profitable in the new financial year.

"The US operation, Spescom Software Inc, continues with the momentum reflected in its third and fourth quarter results. Market demand for the company's eB suite of configuration management products is growing and a number of significant deals were recently closed. This trend is expected to persist during 2003."

Farah confirms the group's UK operation has commenced roll-out of the initial 2 million NTelite network termination devices, to BT. This phase alone is valued at lb20 million with a further potential requirement for 23 million units should BT supply the product to its entire customer base.

"The NTelite holds great promise for diverse international applications and in this regard Spescom and BT have entered into a joint agreement to market the product worldwide," says Farah.

He emphasises that Spescom DataVoice, a leading innovator in multimedia transaction recording and commanding over 70% of the SA market, continues to broaden its worldwide distribution network. The company now attributes approximately 35% of revenues to European deals.

"The year under review produced unpredictable world occurrences which negatively affected global trading conditions. All sectors of the group have been steadily gaining momentum and all are forecasting a continuance of the positive impetus reflected in the second half of the year under review," says Farah.

He adds that the high level of debt, as seen on the balance sheet, should be viewed as an investment that will produce a good return in the current year and years to come.

"Therefore, Spescom has come through this difficult period and emerged strong and on course to attaining the stated goal of achieving 50% of revenues from global operations by 2003," concludes Farah.