Eg Solutions optimistic despite losses
Staffordshire software provider Eg Solutions are trading “in the eye of the storm” after declaring operating losses of £792,000 over the last 12 months.
Chief Executive Elizabeth Gooch said she remained “cautiously optimistic” for the future despite results for the year ending January 31, which showed profits had slipped back into losses.
She said: “Bearing in mind that we are selling to financial services, we have been trading in the eye of the storm.
“I feel cautiously optimistic. We have always been counter-cyclical but with organisations needing to cut costs, we are the perfect solution.
“We have been enjoying an increase in the number of inquiries since November - the survivors in financial services are looking to investments that are going to give a good return.”
She said the company, based at Dunston, near Penkridge, had a “pretty healthy pipeline” of potential orders but said the key was converting them into firm contracts.
And she warned that economic conditions would remain uncertain for the foreseeable future.
“I think these conditions will continue for another three months definitely. I think we will see a lot more consolidation going on and more mergers.
“But I feel we have got this business in a good place - we have been going 21 years and we have seen two downturns during that period; we will definitely come out the other side of this one.”
She said the group headcount had been reduced by a further five in the UK. Eg now employs 32 in the UK and four at its operation in South Africa.
“I do feel that we have done a lot of cost-cutting over the last two years and if we need to do some more, we will,” she added.
Results for the year show that operating losses totalled £792,000 while revenue was £3.7 million. Eg said the Board would not be declaring a dividend.
Non-executive chairman Rodney Baker-Bates said in a statement: “After a good first half in which the company made progress in meeting its objectives, the second half-year deteriorated progressively as the crisis deepened within the financial services sector - our principal market.
“Although our products are firmly within the ‘spend to save’ category, and there is increasing evidence of demand, our clients have subjected expenditure on new and existing IT projects to more intense scrutiny since October 2008.
“This has led to delays in placing orders and, in certain instances, cancellation of projects which were at a late stage of negotiation.
“As a result, performance in the last quarter of the year was significantly below forecast, affecting the results for the year as a whole which were below expectations.”
He said Robert Maxfield had now joined the company as Head of Sales with a brief to convert a pipeline of potential business into firm orders.
