Intelligent Environments closes US operations as revenues suffer
02 August 2001 | 2697 views | 0
UK-based e-finance vendor Intelligent Environments is reporting a significant shortfall in revenues for the first six months of the year caused by the "extended sales cycles and the challenging trading conditions seen throughout the sector".
In a trading update released today, the iE Board confirms earlier warnings of greater than anticipated delays in converting potential orders into secured contracts and revenues.
In particular, three contracts totalling £2 million (of which £1.35 million was expected to be recognised as revenue in the half year) remain in the 'new business' pipeline but have not yet closed. A further contract of £0.2 million (also expected to be recognised as revenue in the first half) was closed in July.
As a result, first half revenues are expected to fall below the £2 million mark.
Efforts to reduce the company's cost base are ongoing. These include the closure of its US operations in Boston and the transfer of all US business activity to partners. These measures are expected to result in an annual cost saving of approximately £1.5 million and reduce iE's annualised cost base to less than £7.5 million. In addition, staff numbers have been cut across all operations from a peak of 116 in 2000 to 75 today.
The proceeds from a recent placing of 17 million new ordinary shares were received at the end of June 2001 resulting in an overall cash balance of £2.8 million at the end of the half-year.