Infobank losses take turn for worse

Software reseller unable to halt downturn despite 90 per cent increase in total revenue. Pieter Preston reports.

Infobank International has seen its losses reach #2.9 million for thetotal revenue. Pieter Preston reports. half year ended 30 June, despite a 76 per cent increase in product sales and a 90 per cent rise in total revenue.

Total income for the period was #21.4 million compared with #11.2 million for the first six months of 1997. The loss was compared with a #1.1 million loss in earnings during the same period last year.

In July, the corporate software reseller, which specialises in electronic commerce, warned investors that profits for the full year would be well below market expectations.

Although Infobank chairman David Fraser called the revised projections 'a technical irrelevance', the announcement prompted the company's share value to fall 80p to 210p last week.

Following last week's interim report, the reseller's stock nosedived again, this time to a 12-month low of 175p per ordinary share.

The Aim-listed company tried to put a brave face on the results claiming business had significantly improved since the end of June.

It cited a pan-European integration deal with Hewlett Packard, a promotional alliance with Intel and an agreement with the Singapore Government to provide an online public information service as evidence of strong long-term growth.

Infobank blamed the losses on two exceptional charges - more than #1.5 million derived from marketing and development costs for its global e-commerce business, while #1.3 million was attributed to set up costs for TrustMarque, its digital distribution services arm.

Commenting on the company's prospects, Fraser claimed: 'Some pressure remains on margins in the product division, but we continue to have strong revenue growth.'