Software firm eg solutions announces £0.74m loss as it prepares for new opportunities
FINANCIAL services software supplier eg solutions has seen transformational challenges significantly erode its financial performance during the first six months – announcing a £735,000 loss compared with a pre-tax profit of £178,000 for the same period last year.
Total revenue for the period also fell, down to £2.24m (2012 H1: £2.85m) and the board has opted not to pay an interim dividend.
Today’s announcement is accompanied by a management shake-up at the Staffordshire-based group which sees founder Elizabeth Gooch step down as chief executive in favour of a new role and the retirement of chairman Rodney Baker-Bates.
The transformational challenges began in February when eg announced a tie-in with US software firm Aspect. The deal has seen Aspect enter into a strategic partnership and reseller agreement with the Dunston business. In return, it has made an equity investment of £1.25m into eg for a 10.69% holding in the company.
In its interim statement, eg said that the tie-in agreement had led to administration expenses climbing to £1.76m (2012 H1: £1.38m). This was to support Aspect and develop a direct sales and delivery organisation in the European, Middle Eastern and Asia (EMEA) region.
“The loss before tax of £0.74m was predominantly the result of this increase in administration expenses due to the investments made, combined with lower revenue for the period,” it said.
The company spun the situation by stating that the tie-in with Aspect would lead to new opportunities in the global back office optimisation sector and it was confident of a stronger second half.
In a statement, it said the deal had “enabled eg to target high value international projects and, already, the company’s sales pipeline has grown to a record £24m”.
On outlook, new chairman John O’Connell said: “Our financial results for this period reflect the investment we have made in the exclusive strategic distribution partnership with Aspect in the Americas and Asia, as well as in our own direct sales channel in EMEA, whilst continuing to enhance our market leading products.
“The sales opportunities that have resulted from this investment underpin our confidence in making a quantum shift in the scale and scope of our business. I am looking forward to helping the Group achieve this goal in my new role.”
