Problems at Bytes 'underestimated`
The magnitude of problems at Bytes Technology Group, formerly Usko, were proved to have been underestimated, says executive chairman David Redshaw.
The technology group has reported an operating loss of R59.02 million for the 12 months to 28 February 2001, on revenue of R763.27 million.
The group incurred an operating loss of R98.58 million in the 17 months to 29 February 2000, with revenue amounting to R1.21 billion.
Bytes has undergone what Redshaw calls a "comprehensive" restructuring. Staff cutbacks included the jobs of several senior executives in the UK operations as well as jobs in the networking operations.
Competition Commission approval for the merger of Mediswitch and QEDI was granted only after the year-end.
"It is anticipated, however, that the merged operation in which the company has a 40% equity stake will be profitable in its first year of operation and should become a major player in its designated market sector," Redshaw says.
Disappointing performances came from the software and services group, which suffered from poor market conditions, particularly in the enterprise resource planning sector.
"The group`s software development business in the Cape, Uskotec, a jointly-owned operation with Old Mutual, had a most disappointing year with delays and cost overruns of a material nature severely affecting results.
"Considering that in the previous year this operation appeared to have performed well, such a reversal was doubly disappointing," says Redshaw.
Bytes incurred an attributable loss of R107.33 million, compared with a R161.44 million loss in the previous 17 months, while a fully diluted headline loss of 5.2c a share compares with a previous 21.7c loss per share.
Altron took over the ailing Usko last year.
"As matters unfolded, it became evident that the magnitude of the difficulties faced and the poor IT trading environment had been somewhat underestimated," Redshaw says. "Coupled with extensive restructuring timetables, this has resulted in the forecast break-even position being delayed."
However, he adds that a number of the major structural and operational issues are "either resolved or substantially resolved". Assuming the benefits of the restructuring and acquisitions made are realised, he expects "a solid, profitable result for the year ending February 2002".
The Bytes share was trading 20c or 5.97% down at 315c on the JSE by midmorning.