18/06/2009 - 12:34

ISS Group tips $2.1m loss

18/06/2009 - 12:34

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Industrial software developer ISS Group has warned of continued subdued demand for its products for the rest of the calendar year as it forecasts an underlying loss of $2.1 million for this fiscal year.

Industrial software developer ISS Group has warned of continued subdued demand for its products for the rest of the calendar year as it forecasts an underlying loss of $2.1 million for this fiscal year.

However the company expects an underlying operating cash profit of $200,000, after accounting for unrealised foreign exchange losses, increase in doubtful debt provisions and depreciation.

It also expects revenue to be broadly in line with fiscal 2008 levels at $17.6 million.

For the 2008 financial year, ISS reported a net profit of $3.7 million while revenue was $19 million.

ISS today said it expects to close the 2009 financial year with a net working capital of $6 million, down from $8.7 million from the previous year, with the cash predominately used for office relocation.

Earlier this year, ISS withdrew its profit guidance for the current financial year and cut employee numbers as it started to feel the effects of the global downturn.

Today, ISS added that the outlook for the company and its products remained hard to predict.

"Visibility on future increases in activity in our business remain difficult to predict and our overall view would be for continued subdued demand for our products over the balance of calendar 2009," ISS said.

"IT budgets have been constrained at both large scale "blue chip" companies as well as potential smaller customers.

"Notwithstanding reduced global activity, our products remain relevant, in demand and of value to the organisations that we serve.

"Reduced activity in most cases does not imply lost revenue but rather a deferral of opportunities. In recognition of this, ISS Group has during the year tailored its operations to cater for this deferred demand."

ISS added that it had started to see a higher level of inquiry for its major BabelFish product suite and "remain cautiously optimistic that 2010 will see a return to improved trading".

The company remains debt free.

Shares in ISS dropped 0.5 cents to 16c at 14:12 AEST.

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