Square One hit on several fronts

Square One Solutions has reported an R8.5m attributable loss for the year to 31 December 2001, which it blames partly on the devaluation of the rand, the September US terrorist attacks and supply shortages.

The group also notes that local capital expenditure spending was limited during the period.

"Despite these issues, in the latter part of the year the majority of the group's sales divisions achieved their performance and revenue targets with some notching up milestones," says CEO Trevor James.

"The group also turned around a half-year loss of R1.4 million into an operating profit before exceptional items."

James says the severe devaluation of the rand towards the end of the year resulted in an unrealised loss of R3.6 million.

"As a result of the recovery of the rand in the first quarter of 2002, unrealised foreign exchange profits have arisen which partially offset the unrealised losses accounted for at year-end."

He adds that the benefits of the group's expense-management reduction programme over the last four months of the year were realised almost immediately, offsetting other factors contributing to the decline in profitability.

"Centralising operations proved invaluable and the continued focus on people will be a crucial ongoing effort. Ongoing reduction of costs and inventory levels is key."

James says sourcing of certain product lines remained a problem throughout the year due to supplier restructuring and events worldwide. "The group's strategy to reduce and limit product dependency was realised through the group's restructuring."