BSG Bus.Sys.Grp

RNS Number:2083K
Business Systems Group Hldgs PLC
18 September 2001


Immediate Release                                             18 September 2001



                        BSG Holdings Plc ("the Group")


                              Trading Statement


The Group expects to announce its interim results for the six months ended 30
September 2001 on 30th November 2001.  However, your Board considers it
appropriate to issue the following statement on trading.



In the preliminary statement of results for the year ended 31 March 2001
announced on 18 June 2001, we referred to the disappointing utilisation level
within the consulting business of, BSG Limited.  Since announcing our
preliminary results this has deteriorated further.  Consequently, the Board
expects to report a loss before taxation for the Group, for the half year
ending 30 September 2001, of not less than #4 million. This loss includes a
bad debt provision of #350,000, restructuring costs of #250,000 and goodwill
amortisation of approximately #450,000.



BSG Limited



At the time of our preliminary announcement we were hopeful of an improvement
in market conditions.  However, the downturn in demand for consulting services
has lasted for longer than management expected with the result that the
half-year revenues and margins for BSG Limited will be significantly lower
than in the same period last year. Although there are a number of substantial
contracts in prospect , the timing and sustainability of any improvement in
trading is difficult to predict.   Consequently, the Board has decided to
close The Brilliant Agency, its web design business, the closure costs of
which are expected to amount to some #250,000 in respect of 16 redundancies.
This move reflects the Board's assessment of a change in market demand away
from "look and feel" site design to "user experience" in transactional web
use.  BSG Limited supplies user experience through Atomic Tangerine, which was
acquired by BSG Limited in June 2001.



Following the redundancies referred to above, the Board is aiming for
utilisation levels to allow BSG Limited to reach a break-even run rate
position by the end of the current financial year.


Webgenerics



Despite strong market interest for the newly released dotEncrypt products and
our dotHosted product, revenue is below our expectations.  The Board is
therefore anticipating a loss of #1.5 million before taxation in the first
half of the current financial year.  The Board  is monitoring closely the
ongoing costs of investment in the Webgenerics suite of products and has an
initial target of achieving a break-even run rate position within Webgenerics
by the end of the current financial year.



Current trading



BSG has been successful in becoming a preferred supplier for the OGC (Office
of Government Commerce) which will play a major role in providing all
Government departments with innovative and value for money IT projects.



Despite the difficult trading conditions the group's cash position remains
strong with some #10.5 million at present. Given current market conditions the
Board does not expect the Group to trade profitably in the second half of the
current financial year.  However, the results for the second half are expected
to be better than in the first half and the Board remains confident for the
prospects of the Group over the medium term.



Enquiries

BSG Holdings Plc

Nick Gerard, Group Chief Executive                  Tel: 020 7880 8888
James Wheaton, Finance Director

Buchanan Communications
Tim Thompson                                        Tel: 020 7466 5000
Catherine Miles

Bus.Sys.Grp (LSE:BSG)
Historical Stock Chart
From Jul 2024 to Aug 2024

Bus.Sys.Grp (LSE:BSG)
Historical Stock Chart
From Aug 2023 to Aug 2024