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IFCA takes first-year loss

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IFCA Technologies Limited, a supplier of software solutions and computerized business equipment, today announced its first interim results reporting a loss of R1,37-million in earnings for the period ended 30 June 2007. 

“IFCA sWare had faced a couple of unforeseen challenges over the last 6 months, one of which was when a large client stopped development of the system installed in anticipation of the sale of their loan book. This significantly impacted our revenues” says BK Wong, CEO of IFCA Tech. “If this client’s requirements for development services had continued as expected, the company would have otherwise reported an operating profit.”
Some projects were also disrupted and prolonged when IFCA unexpectedly lost, at short notice, a number of overseas contracted staff who was affected by crime incidents in South Africa. The company has consequently accelerated the hiring of local staff and is proactively repatriating the remaining overseas staff. The immediate effect has been an increase in staff costs but in the longer term, staff costs will reduce given that the overseas staff members are considerably more expensive to maintain.
IFCA LodgeMan, a system designed for boutique hotels, guest lodges and B&B’s that the group acquired in the first half of this year, has started to positively impact on the revenue streams of the group from July 2007.
Turnover in IFCA hWare was also lower than anticipated because of delays in the uptake of both the TOTalizer and mimio Xi by channel partners both regionally and internationally.
However, in June 2007, IFCA hWare signed a distribution agreement to appoint Digitot International (Pty) Limited as the exclusive distributor of the TOTalizer inventory control product to the hospitality industry in South Africa and 13 other countries in Europe, South America, Africa and the Middle East.
Digitot will be marketing the TOTalizer products through its subsidiaries and distribution channels located in these countries under its own brand name, DigiTag. IFCA hWare will continue to market the TOTalizer under its current name to the manufacturing and pharmaceutical industries in South Africa directly and through distributors, internationally.
Wong says that he remains confident of the sales prospects of the group’s products and that constant reviews of existing sales leads indicates that the group will report a profit for the year. A trading update will be released in due course to keep shareholders informed of progress. Furthermore, the group is in the process of formulating an empowerment strategy that will position the group for growth.
Wong adds that the nature of the company’s business is such that sales are cyclical and that sales prospects that may be closed over the remaining half of the year could substantially make up for the loss registered in the first half of this year.