ConvergeNet anticipates further losses

Listed ICT player, ConvergeNet says it expects a decline in the earnings per share and headline earnings per share for the year ended August 2012 of approximately 282% and 219% respectively compared to EPS of 2.66 cents and HEPS of 2.70 cents before.

According to ConvergeNet, the trading loss has resulted primarily from the adjustment to deferred tax assets, once-off impairment of goodwill and other financial assets.

It added that the cost of establishing the Africa operations in Gabon and Congo Brazzaville, along with investment in new businesses, and costs associated with restructuring of the Board following the change of control of the company also affected earnings in 2012.

ConvergeNet also made investments to enhance its sales capabilities and capacity.

In September, the group entered into a sale agreement with Pepkor for the sale of its remaining 15.05% interest in Future Cell for R40 million in cash.

It also advised that ConvegeNet Management Services (CMS) had entered into a share purchase agreement with Titan to purchase approximately 71.48 million ConvergeNet ordinary shares, representing 7.759% of the issued share capital of the group.

The deal translates into 29.675 cents per share, or R21.21 million.

For the year ended August 2011, ConvergeNet reported revenue from continuing operations of R1.029 billion, with an operating profit of R27.24 million.

In April, the group reported a decline in revenue for the six months ended February 2012, along with an operating loss, primarily as a result of the delays in awarding and implementation of some major contracts.

The company expects to publish its results on about 22 November 2012.

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ConvergeNet anticipates further losses