Optima losses exceed $5m
- 05 March, 2008 16:52
- Comments 1
Local PC vendor, Optima (ASX: OPI), has reported a net loss of $5.1 million in the six months to December 31.
According to its financial report, the losses include tax expenses of $2.8 million, as well as an impairment loss of $340,000 relating to goodwill recognised upon its acquisition of Digital City in October. Excluding impairment losses, Optima's operation loss was just over $2 million.
Of this, Optima's technology business contributed $1.4 million, while the Digital City retail business represented $940,000.
Revenues were also down 37 per cent to $26.2 million from $41.6 million in the six-month period.
As in its previous financial reports, the company blamed the shift to state-based centralised PC procurement as a major factor in its shrinking revenues. It highlighted the loss of business through the NSW Department of Education as a case in point.
"Most of the lost revenue related to education sales - we had been working with NSW education for many years before they opted to go 100 per cent with IBM last year," chairman and managing director, Cornel Ung, said. "We lost about 10-15 per cent of out total business as a result of that."
Outside of education however, Optima claimed gross margins had increased by 18 per cent in the channels and retail side of the business. They would continue to be the areas of investment in the coming six months, he said.
"We are continuously working to bring cost in line with the level of our current revenue and gross profit and invest resources in profitable and growth areas," the company said in its statement. This had included reducing overheads by 17 per cent in the last six months.
Ung said Optima was working to significantly reduce operating costs in the services side of its business by cutting back the use of third-party services providers. The company also lost about 13 per cent of its total headcount in December last year. Most of these staff cuts were in the education account management space.
Although forecasting a reduced loss in the second half of 2008, Ung was confident Optima could return to profit for financial year 2009. The Digital City acquisition should also start to contribute positively to its bottom line in the 2009 financial year, he said.
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Comments
ITSnail
Optima - A sign of the times
Optima is a sad example of how the market can move away from you through no fault of your own. Cornel Ung and his team had built one of the most successful whitebox businesses in the country but are now seeing that whittled away year after year as major customers, particularly in the public sector, increase their spending with the multinationals. I hope Optima can turn it around but think they have about as much chance as the local car manufacturing plants.
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