A radical revamp aimed at transforming 4Front into an ebusiness services provider left the reseller millions in the red in the last quarter and is set to badly dent its coffers this year.
4Front reported a loss of $6.4m (£4m) for its fourth quarter ended 31 January after incurring a one-off charge of $10.5m as a result of the reorganisation.
Turnover for the quarter was up 25 per cent from $57.1m to $71.2m. However, profit before charges was $1.4m, down 25 per cent from $1.9m.
Turnover for the year jumped 70 per cent from $149m to $253m on the back of a 98 per cent increase in services revenue. Product sales increased 22 per cent. Profit for the year increased 35 per cent from $5.8m to $7.9m.
4Front also made $2.3m from the sale of Hammer.
Mark Ellis, president at 4Front, claimed the group's transformation into an e-business service provider, first unveiled in December 1998, was successful, leading the VAR to build an ebusiness order book of $3m within three months and win major clients.
Other successes for 4Front in the year included a strong performance in the services sector and a strengthening and broadening of its service offerings.
4Front also expanded into several countries, including the US, Germany, Sweden, Japan and China, and bought services companies SIL and CVSI.
Ellis said the company will accelerate the roll-out of its ebusiness and net training activities in Europe this year to enable it to seek market share more aggressively.
The reseller is also streamlining and improving its operating costs.
This reorganisation is expected to result in a charge of $15m for the first half of the year.
"We believe 4Front has taken, and is continuing to take, important steps to ensure that the company can focus more effectively on the business areas where the most rapid growth is likely, and where higher margins can be achieved," Ellis said.
Infrastructure provider says international sales now make up 51 per cent of its revenue
Suzanne Chappell of TMS plans sailing venture after selling Oxfordshire-based TMS to acquisitive Chess
Withdrawal of credit insurance by some providers a 'reflection' of current challenge facing IT sector, according to MD Steve Soper
SMART's UK managing director joins Lenovo to boost SMB business