Total Client Services (TCS) was hit with a double whammy in the year to February, as new contracts failed to make up for the loss of its Cape Town deal, and it had to fork out over R1.4 million to a rival bidder in a long-running dispute.
TCS provides law enforcement solutions to traffic departments around the country. Its products comply with the new Administrative Adjudication of Road Traffic Offences Act, which will replace the current traffic law enforcement legislation in SA.
In the year to February, TCS saw revenue slump 33.8%, to R47.5 million, and a R5.3 million loss became a R9.6 million loss. Its headline per share loss of 2.48c is wider than the 1.38c loss last year.
Its year-end results led to its shares dropping to a new 52-week low, down 33.3%, or 1c, to close yesterday at 2c.
TCS has battled because of government's repeated delays in implementing Aarto, and it hasn't managed to offset the loss of a contract with the City of Cape Town, which came to an end last December.
“Revenue from the Ekurhuleni contract and the newer smaller contracts of Cederberg and Overstrand were insufficient to offset the decline in the revenue from the City of Cape Town contract,” notes TCS.
Legal wrangles
In 2004, TCS won a deal to provide traffic violation equipment to Cape Town, but was then forced to partner with rival bidder Syntell. The two ended up in a dispute and sued each other.
The legal battle was finally settled in March this year, when the arbitrator ruled that TCS must pay Syntell R1.4 million and interest.
TCS failed to get the R100 million deal extended, losing out to Syntell, which has since submitted another claim, for R1 million, against TCS, which could go to arbitration, it says.
The company is also in a dispute with its former landlord, which is claiming R1 million from it. TCS is waiting for a court date, but doesn't believe it owes the landlord anything.
In addition, the South African Revenue Service has refused to allow TCS to write off a R3.5 million loss that occurred because of irregularities at a subsidiary's bank account.
TCS was spun out of Labat and listed separately in April 2008. It provides integrated traffic law enforcement solutions, including technology, proprietary application software and administration services to local authorities and provincial administrations.
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