24th Dec 2015 08:45
LONDON (Alliance News) - eServGlobal Ltd on Thursday said it swung to a loss in its recently-ended financial year due to goodwill impairments and delays in orders and projects, but said it expects to begin recovery from this in financial 2016.
The mobile financial services company said it made a pretax loss of AUD31.5 million in the year ended October 31, having made a pretax profit of AUD27.8 million the year before.
Revenue also fell to AUD25.9 million from AUD31.3 million.
eServGlobal said its results were hit by "significant provisions for old debtors" and costs incurred in delivering prior period projects causing a delay in recognising work in progress, as well as a full impairment of the carrying value of goodwill.
In addition, there were delays in closing certain high-margin orders before year-end, although eServGlobal expects these to be booked in financial 2016.
"These numbers confirm the very poor year that was 2015 for eServGlobal. The consequent effect is that working capital remains tight in terms of operational cash flow in the short term. We expect to begin a recovery in the second quarter of the 2016 financial year. The board and management are targeting generating operational cash in 2016 based on better management, better control, better sales execution, and the substantially lower cost base," Chairman John Conoley said in a statement.
Shares in eServGlobal were untraded on Thursday morning, last trading at 3.50 pence.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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