Reseller minnow Avison managed to pull an unusual set of results out of the bag today, reporting operating losses that are nearly three times higher than its sales.
The LSE-listed firm, which flogged its IBM Cognos business Inca Software to Logicalis earlier this year for £7.3m in cash, filed losses of £7.8m on sales of £2.6m from continuing operations for the year ended 31 January 2011.
Red ink on the accounts was caused by a £4.5m one-time impairment charge on the April acquisition of investment shell Xploite and its subsidiary Storage Fusion – a SaaS analysts firm – and £1.5m in other strategic and one-off costs.
EBITDA loss for the year was £100,000, which interim non-exec chairman Mark Battles blamed on the time spent piloting Acorn Systems profitability software, but he said the process resulted in a three-year "global cost to serve" contract with Unilever.
"This contract will generate significant revenues for Avisen over the next three years from the provision of a perpetual licence, managed services and ongoing consultancy," he said.
The March sale of Inca was "influenced by the constant margin pressure the division faced and our concerns surrounding our ability to scale the business and be up to date with the latest SaaS technologies without further significant investment".
Battles said cash received from the sale would be used to fund future growth in its two main trading divisions, Acorn Software reselling and Storage Fusion.
He said the business "needs to add more scale" to compete in the market more effectively and the board had "identified several acquisition opportunities which it is actively pursuing". ®