Information Technology Editor
EFFORTS by the failed software company Y2KTec to reinvent itself as CCI, an accounting business services firm, may have merely postponed rather than prevented its ultimate collapse.
Directors of CCI issued results yesterday in which auditors KPMG warned of a material uncertainty regarding its ability to continue as a going concern.
Figures for the year ending December last year make gloomy reading. An attributable loss of R2,4m compounded R5,8m lost last year, placing pressure on CCI's cash flow and leaving it unable to meet repayments on interest-bearing debt.
The directors said they were negotiating to restructure its debts and although nothing had been finalised, they were confident that a satisfactory deal could be reached.
Revenue for the year stood at R10,1m, up from R7,8m a year ago, but its operations lost R954000 compared to a profit of R2,2m. Finance costs; an exceptional loss; a loss on disposing of investments and writing off goodwill took the figures down further, leaving a headline loss a share of 0,50c, down from a profit of 1,05c.
The dismal reading continues with news that CCI's acquisition of accountancy company MMJ had failed and was being partially reversed. Shares issued to buy MMJ will be repurchased.
A termination agreement is being negotiated with the vendor and R630000 has been fully impaired under exceptional items.
The directors claim CCI is looking healthier after significant structural changes. Three divisions which inflicted trading losses of R542000 were closed to leave three units, which were all "performing satisfactorily", they said.
Results for the first quarter show those divisions pulled in profit of R1,5m, although their future success would depend on the conclusion of the debt restructuring.
The next move may be a delisting, as the directors said the cost of being listed was excessive given the profit-generating ability of CCI business units.
Apr 15 2003 07:07:56:000AM Lesley Stones Business Day 1st Edition
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