Streamworks' losses worse than expected

By Iain Scott, ITWeb group consulting editor

Johannesburg, 12 Jul 2001

JSE-listed Streamworks Group has released financial year-end results which are significantly worse than expected when it published a profit warning in January.

Although the profit warning said the company's earnings for the year to 31 March 2001 would be lower than those of the previous year, significant losses have been incurred.

Streamworks Group specialises in industrial IT and supply chain management.

CEO Russell Kleyn says further project overruns and delays in the initiation of new projects contributed to the slump in the group's fortunes.

Other factors included a conservative write-off of all e-commerce development work, restructuring and retrenchment costs, and the write-off of the entire goodwill arising on the Logicon and DLRA acquisitions.

Streamworks Group announced in April that it was selling its wholly owned subsidiary, Streamworks, to JSE-listed DNA Supply Chain Investments for between R18.72 million and R43.68 million, calculated on a formula using profit targets.

It said at the time that the deal would be settled by the issue of DNA shares at 60c per share, which would be unbundled to Streamworks Group shareholders. After that unbundling, it would apply to be transferred to the JSE's cash companies sector.

Kleyn says the group is confident that the disposed entity will achieve budgeted profitability in the coming year as well as sustainable growth in future.

The Streamworks Group share was untraded at 27c on the JSE this morning, while the DNA share was untraded at 64c.