National Telecoms Group has wiped $22.6 million off its revenue projections in just eight weeks.
In mid-December, the group announced that it expected a net profit after tax of $7.6 million for the year ending June 30, 2003. Last week, in an announcement to the ASX, it revised this figure to a projected net loss of $15 million.
The company’s share price has been on a continual slide since August 2002 when it sat at $1.50. It closed last Thursday at 5c.
Nissen said that “continuing pressure on its sales operations” had made a radical restructuring necessary if the group hoped to return to profitability. The company had delayed a rights issue until the restructure was finalised.
He declined to offer any explanation for the huge downturn in earnings.
According to reports, most of the losses relate to goodwill write-offs and restructuring costs, as the company looks to close down its direct sales operations.
NTG plans to become a wholesale provider of telephone and office equipment, software for call tracking and unified messaging, installation and ongoing service and support.
Meanwhile, NTG’s existing partners, both reseller and vendor, are trying to distance themselves from the group’s run of bad press.
Telephony manufacturer, Alcatel, said NTG’s partner status had been downgraded for some time now. It was only allowed to sell low-end product lines and had to source them through a distributor.
Sources inside the vendor said the relationship with Alcatel deteriorated after NTG sought a closer supply partnership with NEC.