ConvergeNet losses accelerate
ICT infrastructure supplier ConvergeNet has reported an operating loss of R48.2 million for the half year ended February 2014 from a prior loss of R22.2 million.
Revenue from continuing operations declined to R119 million, from R132 million in 2013.
The group reported a headline loss for the period of 23.90 cents per share, from a prior loss per share of 1.89 cents.
ConvergeNet distributes and resells an extensive range of industry products including cabling, networking, telecommunication, VoIP, servers and storage, infrastructure management and data center products.
The group said that the interim period was characterised by difficult trading conditions, especially within the DC Power and System Integration divisions of CK Solutions.
An impairment charge of R34.8 million was recognized in respect of goodwill attributable to CK Solutions.
“The loss of a key battery supply tender and the cessation of the mobile build program of a major client resulted in a significant earnings gap versus budget, which is expected to persist during the medium term.
“Unless trading conditions improve further impairment of the investment in CK Solutions is likely in the medium term,” ConvergeNet said.
Looking ahead, it said that its board of directors is carefully considering the options that are available to address the continued under-performance of the group.
“The high cost-base and the difficult trading conditions experienced by its remaining subsidiaries during the period under review are expected to continue into the next financial year.”
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