Gresham Computing, a provider of enterprise integration software to financial institutions, has pulled out of the red and reverted to a net cash position for the fourteen months to December 2001 following the disposal of select non-core assets. With an operating loss forecast for 2002, the company is pinning its hopes for recovery in the longer-term on the delivery of solutions for storage management, EAI and real-time nostro.
For the 14 months to 31 December 2001, the group is reporting profit before tax, goodwill amortisation and impairment of £0.9m against a loss of £3.6m the previous year. The total operating loss before goodwill was £1.7 million, against £3.3 million losses to December 2000. Turnover from ongoing operations was marginally down, £18.3 million versus £18.8 million.
The company wrote off £1.2 million from the closure in March of its Automated Solutions business, but banked £5.8 million from the disposal of the first tranche of shares in its SIM Group subsidiary. Disposal of the remaining shares in SIM were completed yesterday for an initial consideration of £6.9m plus 10% of SIM's turnover to October 2002. The profit realised from this sale is expected to offset an anticipated operating loss in 2002.
Andrew Walton-Green, chief executive of Gresham comments: "Despite difficult trading conditions in 2001, the disposal of the first tranche of SIM shares has returned the group to a net cash position...We are now focused on three areas of operation which we believe will show significant long-term growth potential."
Despite continued underperformance in the storage management business, Walton-Green says the company is forging business relationships in a bid to grow the potential for its Extended Data Technology family of products. This includes a global distribution agreement announced with Tivoli-IBM in June 2001.
Gresham is also anticipating an upsurge of interest in the new C3 version of the company's flagship enterprise application integration (EAI) engine Casablanca. Improvements in speed and scalability are expected to provide a platform for further sales to financial sector clients, and as a springboard to other markets.
Gresham confirms that its revenue sharing agreement to deliver a new real-time nostro application with Cable & Wireless is on target for release in the second half of the year. In a statement, the company says: "Whilst the build-up of revenues will initially be slow as the service is rolled out, the directors consider that this service provides the group with an excellent opportunity for significant recurring revenue growth in 2003 and beyond."