Storage solutions provider Maxtec has reported an operating loss of almost R9 million for the year to 31 August 2001, despite a 44.7% increase in revenue.
Executive chairman George Talbot says the poor results reflect a difficult trading climate.
<B>Figures at a glance</B>
Maxtec results for the year to 31 August 2001
Figures for the previous year in parentheses:
Revenue: R117.82m (R81.41m)
Operating profit: -R8.98m (R10.76m)
Net profit after tax: -R10.27m (R7.88m)
HEPS: -7.2c (9.2c)
Current assets: R30.93m (R42.02m)
Current liabilities: R20.79m (R28.25m)
Cash resources: -R4.72m (R2.33m)
He lists several other factors that he says exacerbated the situation. These include costs relating to establishing the end-user business in what he describes as a depleted business climate.
Other aggravating factors include gearing up with technical skills to enter the end-user market; changes in routes to market by several vendors; tighter margins from vendors; a write-down of R5.4 million worth of inventory; restructuring costs; poor sales in the local authority division due to elections, demarcation and resulting postponement of decisions; and a write-down of R3.7 million of the loan to the share incentive trust.
The local authority division has been consolidated with the Johannesburg office, with service centres in the Free State, KwaZulu-Natal and Western Cape.
Talbot says the business was re-engineered, and a number of changes have been made at management level to balance the workload and make the best use of resources.
The group announced the resignation of MD Graham Hayes in September. Talbot took over his functions and will continue to manage the group.
Perry Hutton has been appointed chief operating officer, while Tony Strutt, who previously headed up the Cape Town operations, has been appointed Maxtec Peripherals MD. Anthony Bruce has been appointed ESS sales director.
Talbot says although market conditions might not improve, the group`s management believes that the changes will allow for profitability in the new financial year.
The Maxtec share price was unchanged at 10c on the JSE late this morning.
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