Square One Solutions incurred a net attributable loss of R0.93 million for the six months to June, the result of investments and acquisition costs in its business solutions line.
Although turnover rose by 60.3% from R36.65 million to R58.75 million, operating profit fell from R40.09 million to R0.98 million. A pre-tax loss of R0.22 million compares with a prior-year profit of R2.13 million.
"As part of the group strategy to expand the group's business offerings, as well as to solidify its black economic empowerment credentials, the group concluded two acquisitions in the first half of the year," says CEO William James.
The acquisitions added to the group's skills base in the areas of application and infrastructure systems integration.
He says the ongoing investment in the business solutions line of business, coupled with the costs associated with the acquisitions, played an instrumental role in the loss.
"While the strategic decision to invest in a new line of business coupled with these acquisitions are expected to yield positive results in the future, management is still in the final stages of working through the process of streamlining and realigning the group so as to maximise the consolidated return to shareholders."
He says the new lines of business have either secured, or are securing, new business at attractive margins.
Square One focuses on providing niche business enabling services, mainly biometric authentication, power solutions, product coding and marking solutions, application and systems integration services, wireless and infrastructure solutions, storage solutions and telecommunications and service provider solutions.
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