Spescom has posted a net loss of R12.24 million for the six months to end-March, which CFO Jene Palmer blames on the unpredictability of the telecommunications sector.
The loss compares with a net profit of R16.8 million for the same period the previous year.
Turnover fell by 28.7% from R175.19 million to R124.89 million, while an operating loss of R11.2 million compares with a previous R22.36 million operating profit.
A loss of 17.3c a share compares with previous earnings of 32.5c a share, while the previous headline earnings of 39.1c a share were turned into a headline loss per share of 17.4c.
On the balance sheet, current assets of R115.89 million (2004: R91.75 million) compare with current liabilities of R123.97 million (R117.71 million). Cash resources rose from R25.56 million to R36.92 million.
"This underperformance is directly attributable to the unpredictability of the telecommunications sector, specifically with respect to delays in finalising large contracts," says Palmer.
"The most notable outcome of this trading period is the emergence of a more focused international group with increased channels to market and solid pipeline opportunities which are expected to contribute to improved performance in the second half of the year."
Spescom has discontinued its non-core test and measurement division and the call centre and voice recording divisions have been restructured to improve access to local and international markets.
"The group has increased its investment in sales and marketing activities across all divisions, and continues to broaden its international footprint," Palmer says, adding that this should have a positive effect in the second half.
However, the volatility and unpredictability of the telecommunications arena continues to affect the ability to manage and formulate meaningful forecasts for the sector.
"The telecommunications market is fragmented by nature. The true impact of liberalisation is not yet a business reality so trading continues to be reliant on large deals and a small customer base," says Palmer.
Spescom expects to deliver an improved performance in the second half, although full-year headline earnings are expected to be substantially lower than those of the previous financial year.
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