Square One's revenue drops

Square One's revenue for the half year to June dropped by 41% as its clients cut back on technology budgets.

The company says, as a result, it made a net loss of R111 000, compared with last year's profit of R162 000. Square One reported a loss and headline loss per share of 0.3c.

Gross profit has only decreased by 12%, due to higher margins. Square One has continued with its focus of reducing revenue streams from lower margin businesses to service contracts, which have higher margins.

Although the results appear to indicate a decline in the business, its fundamentals are sound, and the business and its customer base are more diversified than previously, it adds.

“The strategic direction of the group remains consistent with previously stated intent and the group has used this solid foundation as a springboard into the newly acquired markets and client base.”

It expects its initiatives to start paying off in the second half of the year. “With the groundwork now in place, Square One expects to unlock greater profitability, while continuing to secure additional, sustainable and predictable contract-based revenue for the group.”