Software problems and patent litigation uncertainties contributed to a deterioration in trading conditions for UK direct access technology vendor EasyScreen, which last week accepted a £14.8 million takeover bid from futures broker Refco.
A third quarter results statement issued by EasyScreen today reveals the true extent of the problems plaguing the company. Production problems with the latest version of the company's software and delays in development of the new ASP-based EasyExchange solution have contributed to a 13% dip in sales and losses of £0.9 million for the third quarter.
EasyScreen says a service pack upgrade is currently being implemented, to address performance, stability, scalability and support issues for clients upgrading to Version 2.2 of the company's software, and that other development projects which were completed in January 2005 will now not be available in production until the next calendar quarter.
This period was also notable for the destabilising effect of patent infringement claims by rival US-based vendor Trading Technologies. Earlier this month TT announced a claim for patent infringement against Refco, including the EasySolution joint venture.
EasyScreen maintains that its software is not at material risk from TT's patents. Nonetheless, says Philip Docker, EasyScreen chairman, "the uncertainty is having an impact in signing of new contracts and I expect this uncertainty to continue for some time to come".
In particular, a major deal with Man Financial, announced by EasyScreen last October, has been put on hold indefinitely until outstanding patent issues have been resolved.
EasyScreen, which has welcomed the approach by Refco, says the trading outlook remains uncertain with little prospect for an improvement in turnover going into the final quarter.