ConvergeNet\u00a0has reported\u00a0an operating loss from continuing operations of R98.7\u00a0million for the year ended August 2013,\u00a0compared to an operating loss of R68.1 million in 2012.<\/p>\n
The ICT firm pointed to an\u00a0increase in operating expenses as the\u00a0reason\u00a0for its\u00a0wider\u00a0loss, while the group also looked to offload several subsidiaries during the reporting period.<\/p>\n
During the year revenue from continuing operations increased\u00a0by 13.5% from R238.5 million to R270.6 million, whilst the\u00a0gross profit margin increased from 19.7% to 21.3% compared to\u00a0the corresponding period, primarily as a result of a change\u00a0in the business mix.<\/p>\n
Operating expenditure from continuing operations increased from R135 million to R168.8 million. Included in\u00a0operating expenditure are impairments of goodwill and other\u00a0financial asset to the amount of R58.7 million, Convergenet said.<\/p>\n
This, the group added, resulted primarily due to the\u00a0restructuring of the group and sale of subsidiaries including Sizwe.<\/p>\n
The Group loss from continuing operations for the year ended\u00a0August 2013 was R105.0 million, from R69.4 million in 2012, while an attributable loss from continuing operations was R101.4\u00a0million (2012: R68.6 million) resulting in a\u00a0headline loss\u00a0of 4.97 cents per share.<\/p>\n
The ICT firm said that an impairment of discontinued operations related to the\u00a0impairment of the goodwill of Telesto amounting to R16.5\u00a0million and Sizwe Africa IT Group in the amount of R 50.8\u00a0million. In addition, Sizwe has impaired goodwill to the\u00a0amount of R5.0 million.<\/p>\n
Looking ahead, ConvergeNet said that following a financial year of change, the disposal of non-core and loss-making subsidiaries and a rationalisation of\u00a0the capital structure of the group, the key mandate\u00a0will be\u00a0to return the group to profitability in a cost-controlled\u00a0manner.<\/p>\n
“The key subsidiaries, Structured Connectivity Solutions and\u00a0CK Solutions, are well positioned to capitalise on strong\u00a0domestic demand for ICT infrastructure products and services,\u00a0which is expected to continue into the 2014 financial year,”\u00a0ConvergeNet said.<\/p>\n
“The group will look to expand on its pan-African base station\u00a0management opportunities and diversify its cabling and power\u00a0supply product offering to the rail and mining industries,” it said.<\/p>\n
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