Stella Vista Technologies moved into loss-making territory in the six months to 29 February as revenue plunged by 80%.
"The sporadic nature of our business has resulted in disappointing sales that followed the extraordinary success of our Cricket World Cup project, hence the need to finance our current cash flow with short-term borrowings," says CEO Muris Tabakovic.
"The situation has been exacerbated by our inability to make significant inroads into international markets, due to the lack of working capital required for expansion."
Revenue fell to R5.58 million from R28.18 million for the same period a year earlier. This, combined with an inventory impairment charge of R7.7 million, led to an operating loss of R7.54 million, compared with a profit of R2.02 million previously.
The group, which specialises in multimedia communications systems, incurred a net after-tax loss of R5.77 million. Last year it achieved a net profit of R1.29 million. A headline loss of 4.19c a share compares with year-earlier earnings of 0.92c a share, while the group's net asset value slipped from 10.83c a share to 5.22c a share at the end of the period.
Tabakovic says predicting the future has become "extremely difficult".
"While we have the capital constraints mentioned, the market for LED (light emitting diode) displays is expanding worldwide and the price of basic components is declining. We are working to take advantage of these great opportunities by using our technological advantage and competitive pricing levels."
The Stella Vista share was untraded at 3c on the JSE this morning.
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