Ixchange, which is to close Ability`s UK and Asian Pacific operations, expects FrontRange and Ability to be operating at break-even on a monthly basis by June.
The group has issued a third-quarter review of its operations in what it says is a bid to improve disclosure.
Ixchange`s share, which had already plummeted from 415c at the beginning of the year to 208c on 26 February, lost 40% to 125c in the two days after reporting a larger than expected loss for the six months to end-December 2000.
CE Derek Kreunen says revenues at Ability came in 25% below forecast, which resulted in a higher than expected operating loss.
"A key element of the Ixchange group`s current strategy is to manage appropriately for prevailing market conditions. In line with this strategy and in view of Ability`s recent poor APAC (Asian Pacific) performance, it has been decided to close Ability`s APAC operation."
The decision was based on the continued poor trading and outlook in the region, combined with the high-cost infrastructure.
Ability`s UK operation is also to be closed. Although the region performed to target, the outlook is poor, Kreunen says.
He expects Ability to post a decline of 5% to 15% in revenue for the six months to 30 June 2001 compared with the previous six months. The operating loss is expected to improve by 25% to 35% and the operation is expected to break even by 1 July.
Kreunen says FrontRange achieved its internal budget for the three months to 31 March, with satisfactory revenue growth over the same quarter last year. However, Ability has reported a higher than expected operating loss for the three months.
Commenting on FrontRange`s performance, Kreunen says: "The restructuring announced at interim results bore early fruit as improved efficiency and cost containment resulted in reduced operating expenses when compared to the previous quarter."
The operating loss at FrontRange has also been reduced.
Kreunen says FrontRange expects to grow revenue 20% to 30% for the six months to 30 June compared with the year-earlier period, and to improve the operating loss by 35% to 45% over the first six months of this financial year.
"It is anticipated that FrontRange will be operating at break-even from June 2001 onwards," he says.
JustEnough has been closed because of a lack of outside investment, while NeuraTech is expected to be profitable by June. Staff numbers at NeuraTech were cut by 35% during the quarter.
Fraxion is expected to be generating revenues by June.
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