AltX-listed outsourcing company Dialogue Group will be free of auditors' concerns as soon as it turns a profit at its local division, says chairman Peter Watt.
This week, the JSE drew attention to an emphasis of matter audit opinion in the company's results for the year to December.
Of the company's divisions, only the local division - Dialogue Group SA - is a worry, notes Watt.
As soon as that division makes a profit, the loss would be turned into a deferred tax asset worth about R10 million and the auditors would no longer have cause for concern. “Like magic, the going concern issue goes away.”
The company has already taken corrective action within the unit, with a substantial amount of restructuring having taken place, adds Watt.
It is now a matter of obtaining new business in a challenging market. Watt says the company requires 200 new, quality seats in its call centre business.
The auditors, BDO Spencer Steward, drew attention to Dialogue Group SA, a significant wholly-owned subsidiary of Dialogue Group Holdings, which has an accumulated loss of R10.5 million for the year.
As of the end of December, the company's total liabilities exceeded its total assets by R17.3 million, with losses for the year of R28.2 million. In addition, Dialogue Group Holdings incurred losses of R44.4 million, down from its previous profit of R617 000. As a result, the company had total attributable losses of R58.4 million, the auditors said.
Dialogue's South African operations had been impacted by the introduction of the National Credit Act, which slowed demand in the financial services sector, and management had been slow to react to this change.
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