Raft slips into the red, cuts staff
17 December 2001 | 2346 views | 0
AIM-listed financial software component supplier Raft is reporting a £826,000 loss in preliminary results for the year ended 31 October 2001.
Raft CEO, Frank Mobjerg, says: "Market conditions and increased overheads have led to a disappointing financial result."
Full year revenue grew by three per cent to £9,468,000 (2000: £9,173,000), however second half revenue was 11% lower than the first six months of the year. The disappointing second-half performance coincided with a hike in spending on sales and marketing activities, pushing the company into the red. Total overheads increased by £1.6 million over 1999/2000, of which £683,000 related to sales and marketing.
In its first full-year of trading in 2000, Raft reported pre-tax profits of £171,000.
Mobjerg says the company has moved to eliminate no-recurring costs and reduce employee numbers by 10%, resulting in anticipated savings of £600,000 for the coming year.
He says the number of prospects in the pipeline has increased substantially following the increased sales and marketing focus. "However, with the extensions in the buying cycle for our customers, successful completion of new transactions are unlikely to have an impact until later in the current financial year."
Raft, which is currently migrating its component inventory to the Microsoft .Net platform, says its primary focus during the coming year will centre on the demands arising from the increased regulation of both the financial and energy markets in the areas of credit, operational and energy credit risk management. The company says it is also working with a financial sector firm on the development of a wealth management program for private client asset management.