Interconnective Solutions has not recovered from its disposal of its media divisions, reporting a R3.9 million attributable loss for the year to April, due in part to the chunk of revenue lost to MP3s.
Revenue was down 41% to R13.9 million for the full financial year for the restructured company listed on the venture capital sector of the JSE.
The group, now focused on telecommunications, reported an operating loss of R4.2 million, compared to the R162 564 profit turned in the previous year.
Telkom awarded Interconnective a licence to operate premium rate services, which include televoting, competitions, and information and business services. The group is now pinning its future on the licence and consequently the group has seen an increase in staffing costs.
The group took a knock from disposals this year, including a R786 753 loss from the disposal of its interests in PayDirect as well as a R434 122 loss after disposing of its interests in Value Music and BG Music.
Management says the pressure on consumer spending impacted not only on the company`s music division but the entire music industry, with industry volumes declining by over 30% during the accounting period.
"The pressure on the music industry locally and internationally, as well as the introduction of technologies such as MP3 which offers easy duplication, negatively impacted on music sales and in line with the group`s re-focus it was decided to dispose of its two music interests previously accounted for as associates," says the board.
The group reported a headline loss of 2.4c per share, compared to the 1.3c profit achieved for the prior year.
Related stories:
Interconnective Solutions incurs attributable loss
Share
