Global Technology Holdings (Glotec) has warned that its loss for the year to 31 December 2002 will be significant.
It has also issued a cautionary notice saying it is in talks that could have a material effect on the price of its shares.
The market was already expecting poor results from the company after it issued an update in January saying that it would report a loss, although it was confident that its trading environment was improving.
Yesterday Swiss Exchange-listed Temenos, in which Glotec has a 15% stake, reported that it had incurred a net loss of $33.4 million for the fourth quarter of fiscal 2002.
The loss is significantly worse than that of the fourth quarter of 2001, when Temenos reported a $0.8 million net loss.
Temenos is a global vendor of integrated banking software whose Globus system is distributed locally by Glotec.
Total revenue for the quarter plunged 42% to $20.1 million, which the company attributes partly to a lower level of new business closed during the first half of the year compared with the same period the previous year and a lower backlog of unrecognised licences at the beginning of the quarter.
Fourth-quarter revenue was also reduced by $1.4 million related to the accounting treatment of Temenos Eastern Europe as a joint venture instead of a subsidiary.
Sales and marketing costs rose 154% to $18.1 million, including one-off charges totalling $9.8 million.
Temenos says the charges relate to a provision for the full amount of receivables from Glotec totalling $2.7 million, which it says reflects the increased political and economic uncertainty in sub-Saharan Africa, and costs of $4.1 million representing the impact of contract restructuring.
Temenos`s $26.9 million operating loss compares with breakeven the year before.
"Deal flow has continued satisfactorily at the start of 2003 and we are confident that we will meet our signings targets for the first quarter," the company says.
"We continue to remain cautious in the current environment of increased economic and political uncertainty."
However, it says a strong second half allows it to confirm its guidance for full-year 2003 revenue of about $130 million. Anticipated revenue originating from business closed in 2002 represents 74% of the target revenue.
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