Software firm halts development of lossmaking ID product
A MANCHESTER-based software development firm run by entrepreneur Scott Fletcher has moved from a profit into a loss as a result of declining sales and an increase in bad debtors.
Conduco plc, which was previously known as Smart Identity, has just announced results for the year to March 31 which show that the company reversed a £58,852 pre-tax profit last year into a loss of more than £200,000 as its sales dropped 12% to £386,130.
The company said that it had invested heavily in sales and product development during the year, particularly on its RTLS asset-tracking device, which uses RFID chips to track equipment. However, it failed to sell any of these systems despite appointing an experienced MD to drive product development.
The MD has since left the business and Conduco has halted development of the product.
Fletcher, who is chairman of the business, said: “The recent departure of the managing director combined with extensive cost-cutting measures has significantly reduced the cost base and as a consequence the company will reduce cash burn to a minimal amount,” he said.
“Although this year has been disappointing, the company now has the cash burn under control and is in the process of carrying out an overall strategic review of the business.
“The company will be in a position to update shareholders on the outcome of this strategic review in the near future.”
Fletcher said that the company’s balance sheet remained well-capitalised, with cash reserves of £853,329 at its year end (2009: £1.1m).
He also said that the amount of recurring revenues generated by its core client base increased by by 18% to £255,682 (2009: £216,207).
