Listed point-of-sale and e-commerce systems developer PEG Technology has reported a $1.1 million loss for the second half of calendar 2000 on over $4 million in revenues and is stripping down its cash-burn rates and cutting back on staff in an effort to return to profitability.
The company was profitable for three and a half years prior to listing on the ASX, and managing director Bruce Mackenzie expects this loss to be an isolated incident.
The $1.1 million loss is actually slightly better than the $1.4 million loss the company's directors predicted in its prospectus. In response to changes in the investment community, the company has had to shed seven of its 80 full-time positions and oust three contractors.
Mackenzie said the six months were a difficult trading period for both e-commerce and point-of-sale software due to the disruption to purchasing patterns caused by the introduction of the GST and the Olympics.
"We are keen to get this loss behind us," he said. "When we listed we said we would spend money on developing infrastructure for our next set of services, and that's exactly what happened."
PEG Technology is in somewhat of a unique position in that it develops and sells systems for both e-commerce and retail sales, so any shift in one market can be balanced out by the other. "The retail market may have been soft in the last six months, but now it's picking up," he said. "Our target is where the point of sale is - whether it's at a Web site or over the counter."
Mackenzie expects the company to reach profitability by its next statement, claiming it has orders for new business already in place and is in good stead to win several contracts under tender. He said he has had to make changes as a listed company due to the investor and media tendency to brand the company as a dot-com, when it is in fact a development house. Subsequently, the company is having to focus on profitability rather than revenue growth.
"We have to get rid of this dot-com stigma," he said. "I would have liked to run a dot-com, I would have had bus-side advertising and thrown much better parties, but the reality is that isn't what we do."
Photograph: PEG Technology managing director Bruce MacKenzie.