Turnaround at FrontRange

By Iain Scott, ITWeb group consulting editor

Johannesburg, 19 Aug 2003

FrontRange achieved a turnaround in the year to 30 June, reporting an operating profit of R0.36 million, compared with a previous R140.07 million loss on continuing operations.

"We`ve adapted to the conditions in which we have to do business and consolidated our progress towards modest but sustainable profitability," says CEO Dana Buys. He says this was achieved not only by managing costs, but also by maintaining investment in research and development.

However, he says the market for software and other technology solutions remains tough. Total revenue for the year declined 4% in dollar terms.

The company benefited from exchange gains of R31.4 million mainly as a result of dollar weakness.

Of the total of R689.57 million in revenue, 3% was generated in SA, 66% in North America, 25% in Europe and 6% from the Asia Pacific region. Buys says although the South African operations are a small component of the total result, they achieved record revenue and profitability.

The balance sheet shows no long-term debt and current assets at the end of the period exceeded current liabilities, excluding a non-cash deferred revenue liability, by more than 148%.

"Economic projections in the US and other major world economies continue to be mixed and FrontRange will continue to manage the business on the assumption that little or no improvement will be seen during the year ahead," Buys says.

"FrontRange is in a good position to grow when economic conditions in the main world markets begin to improve. We are beginning to shape the business, our thinking and our products so that we can look to growing revenue while maintaining tight control of the cost base."