Product launch, disposals and profit warning from 2ergo
MOBILE technology company 2ergo Group has sounded a profit warning, announced a key product launch and the sale of three overseas subsidiaries.
The Salford Quays-based group said a restructuring programme and tough trading meant it will miss its targets for the six months to February 29. SHarss dipped 3.4% to 69p on the news.
It said the restucturing had raised up to $3.8m through the sale of its non-core North American and Latin American business 2ergo Americas, along with its small Australia and Indian units.
2ergo Americas Inc has been swallowed up by Nasdaq-listed SoundBite Communications Inc which is paying an initial $3m, with the balance expected to be released over a two year period.
In the year to 31 August 2011, the loss before tax of 2ergo Americas Inc was $0.7m.
The AIM-listed company said the proceeds of the sale would allow it to invest in podifi, its new patented contactless mobile coupon and payment redemption technology launched at the Mobile World Congress
It said too that the disposals give it more focus and will slash operating costs by £250,000 a month.
Chief executive Neale Graham, said: “As part of the review accompanying our restructuring programme, we concluded that our overseas operations were sub-scale and not in line with the group’s core strategy.
“As a result, we have taken advantage of attractive opportunities to dispose of these operations whilst maintaining market presence through high quality partners such as our new partner SoundBite.
“Although the strategic restructuring has been a distraction for the management, we are now a focused operation and in an excellent position to capitalise on the numerous opportunities we are seeing in our core business and especially the potential of podifi, our ground breaking contactless mobile coupon and payment technology. We look forward to announcing the progress of podifi in due course.”
