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Spescom Limited
(Incorporated in the Republic of South Africa)
(Registration number 1987/001083/06)
JSE Share code: SPS ISIN: ZAE000017919
("Spescom" or "the company")
TRADING UPDATE
Operational Review for the period 1 October 2001 to date
Communications Solutions Group
The cyclical nature of the telecommunications market has resulted in delays
with respect to orders anticipated for the period under review. Management
is, however, pleased to announce that Spescom's Telecommunications division
has been the successful bidder for a R220 million telecommunications tender
which is expected to have a positive impact on the future earnings of this
group. Despite the slow-down in the general economy, other operations in the
Communications Solutions group remain profitable. Following on delays
experienced last year, the British Telecommunications ("BT") contract for
the network termination device, is now on track in line with BT's revised
specification. This contract is generating cash, although the major roll-out
is expected to commence during the first quarter of 2003. Shareholders
should note that this contract is denominated in Pounds Sterling, therefore,
the current Rand/Pound exchange rate will further enhance Spescom's future
results. Globally, the network termination device will be marketed via a
joint alliance with BT that will commence with the roll-out.
eBusiness Solutions Group
The turnover of the eBusiness Solutions group for the period under
review, was marginally up on that for the comparable period of the previous
year, although lower than budget levels.
The Customer Contact Centre (Call Centre) sector has outperformed
anticipated levels, thereby maintaining Spescom's position as market leaders
in this arena.
The Internet Business Solutions division has under-performed, due to the
devaluation of the ZAR plus increased competition. This has placed
considerable pressure on margins.
The positive trend in the Call Centre activities is expected to continue
and management is refocusing on resources in those under-performing
operations of the eBusiness Solutions Group.
Spescom's DataVoice division remains the leader in voice transaction
management solutions in South Africa. This operation continues to exceed
expectations, both locally and internationally. New Value Added Resellers
(VAR's), established in the UK and Switzerland, are contributing positively
to revenue. Significant orders continue to be secured in this area.
Spescom Software Inc. (USA)
Spescom Software Inc. released its first quarter results on 14 February
2002. These results were extremely disappointing and this trend is expected
to continue for the second quarter. These results will have an adverse
impact on the Spescom Group's consolidated accounts, particularly in view of
the deterioration of the ZAR/US Dollar exchange rate. Spescom Software
Inc.'s management is reviewing a plan of action in order to counteract the
possible effect should the current business climate prevail.
In view of the above the Spescom Group's financial results for the six
months ending 31 March 2002 will not be inline with original expectations.
Future Prospects
While trading conditions are expected to remain difficult for the
remainder of the 2002 financial year management expects the second half-year
results to be substantially better than the first half. In this respect, the
Spescom Group is continuing with its strategy of investing for growth
through the development of proprietary technology, including positioning
itself in South Africa as a leader in select markets.
To achieve this, significant investments have been made which have
resulted in confirmed orders and successful bids, being at an all time high
of R700 million. This should have a positive impact on future earnings and
operational cash flows in the 2003 and 2004 financial years.
It is expected that the results for the six months ending 31 March 2002
will be published on or about Monday, 13 May 2002.
Midrand
27 February 2002
Sponsor
Investec Securities Limited
Member of the JSE
(Registration number. 1972/008905/06)
Attorneys
Kallmeyer & Strime Attorneys
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