Credit: Dreamstime
IT consulting firm PS&C Limited has warned shareholders of a difficult period ahead after posting a $53 million loss for the year.
The ASX-listed company wrote off $49 million of goodwill ahead of predicted flat long-term growth and more than $10-million in debt.
Although PS&C’s revenue rose by 12 per cent to $87.8 million, the company warned it had a number of hurdles to overcome or it would risk no longer being able to operate.
According to its balance sheet for the year ended 30 June, PS&C’s liabilities exceeded its assets by $12.7 million of these liabilities, $10 million was owed by the company to ANZ Bank. The company then took out funding with the lender Scottish Pacific, $5 million of which was paid to the bank.
The group now hopes to renegotiate further repayment terms with ANZ Bank, improve its profitability, net cash flow, as well as raise capital equity and divest business assets.
However, if these do not go “as anticipated”, PS&C warned it would not be able to meet its business objectives and would have difficulty continuing to operate.
The company has already divested itself of one business, Allcom Networks, which it sold to managed services provider Crosspoint Telecommunications for $3.2 million last year.
It also claimed it had implemented further overhead cost reduction measures that will impact positively on earnings in the new financial year.
These include more efficient teaming across sales, recruitment and administration, which the company claims will make the company “poised” for further growth in the year ahead.
Earlier this year, the company also acquired Artisan Consulting, a Salesforce Partner, which it claimed will help it “build out [its] capability” on the CRM platform.
