Temenos, 15%-owned by Global Technology Holdings, has laid off 13% of its staff, spun off its outsourcing operations and rationalised multiple office locations.
Restructuring costs have had a significant impact on the company, listed on the Swiss Stock Exchange. It has reported an operating loss of $18.2 million for its third quarter, compared with a profit of $2.4 million for the year-earlier period.
Total revenue fell 26% to $26.5 million.
"The reduction in total revenue is due to the lower level of initial licence fee signings during the first half of the year when compared with the same period last year and a lower backlog of unrecognised licences at the beginning of the quarter compared with one year ago," says CFO David Arnott. "This has affected both licensing and services revenues."
When adjusted for restructuring costs, the operating loss was $10.2 million.
Arnott says initial licence fee signings were $11.2 million in the quarter, compared with $1.9 million a year earlier.
"This brings our September year-to-date signings of initial licence fees to $34.8 million compared with $28.9 million for the same period last year."
He says the year-to-date signings trend has turned positive for the first time in the past 12 months.
In addition to cutting staff numbers, Temenos has spun off its outsourcing operations to its management team and its jBASE operation has been rationalised around a more cost-effective structure.
"The reversal in the signings trend for the first nine months of the year, and the pipeline of projects scheduled to close over the next few weeks, make us increasingly more confident than we have been through the lowest point in the cycle," Arnott says.
"However, and in order to protect future profitability and cash flow, we continue to remain cautious about the balance of 2002 and 2003, and we will continue to operate under a headcount freeze and pursue further cost opportunities during the fourth quarter."
The JSE-listed Global Technology Holdings share had lost 3c to trade at 16c by late this morning.
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