The latest figures from JSE-listed company Y3K indicate that an extensive restructuring by its new management has come not a moment too soon.
Y3K, which previously all but collapsed after not meeting listing forecasts, has reported a headline loss of 13.2c a share for the 14 months to 28 February 2001.
However, the group`s new management, which has completed a restructuring that saw Y3K left with just one of its original businesses, is anticipating acceptable profit levels in future.
Chairman Linda Wengrowe says it became apparent that the original group of companies was put together solely for the purposes of achieving a listing on the main board.
"Few, if any, synergies could be realised between group companies, either because the businesses concerned were not compatible, or because management was unable to achieve such synergies," she says.
The group essentially collapsed after it failed to meet its listing forecasts, she adds.
"During the period, new management continued to implement extensive restructuring, the disposal of businesses and the introduction of focused professional management. The liquidation of Y3K was avoided."
Wengrowe says only one of the original businesses survived the restructuring and is now profitable.
"The strategy going forward is to aggressively grow the company, but only on the basis of a conservative and well-focused expansion plan."
Total revenue for the 14 months fell to R17.07 million from R53.06 million for the year to 31 December 1999. On a continuing operations basis, revenue increased to R16.02 million from R10.97 million.
An operating loss of R6.28 million before exceptional items compares with a previous loss of R5.09 million. An exceptional item of R2.88 million on the income statement relates to the disposal of the Micro Angelo business for R4 million and a write-off of R1.1 million from the disposal of AMJ Business Systems.
Continuing operations incurred an operating loss of R3.55 million (1999: R1.69 million) before exceptional items.
A net loss of R3.52 million (R4.43 million) was recorded. The headline loss of 13.2c per share compares with a previous 5.9c loss per share. For continuing operations, a headline loss of 7.2c (0.8c) per share was incurred.
Wengrowe says the recently acquired Lanlink has made a positive contribution to earnings.
The Y3K share was untraded at 15c on the JSE by mid-morning.
Related stories:
Y3K turns in loss, leaves future up to Eureka
Change of control at Y3K
Share
