Software and computer services group Prologic posted a drop in half year revenue and gross profit and said following its restructuring in June, its cost base will reduce by £1.12m on an annualised basis.
The group, which provides software, services and consultancy to the fashion & lifestyle sector, posted a hefty pre-tax loss of £510,000 in six months ended 30 September 2011 compared to a profit of £80,000 the year before. Revenue fell £4.37m compared to £4.94m in 2010. Gross profit declined to £1.76m from £2.12m a year earlier.
Chief executive officer Tom Fischer commented, "Although market conditions have remained challenging throughout the period, Prologic has performed profitably (before restructuring costs) in the first half."
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Recurring revenues, which represent 62% of total revenue, rose up 4% to £2.71m.
"Despite difficult market conditions, it is encouraging to see that many of our customers are continuing to trade well. Our latest software releases deliver advanced functionality that drives operational efficiency and enhances the customer experience," the group said.
Adjusted administrative expenses reduced by 14% to £1.76m while adjusted operating profit fell to £12,000 from £84,000 previously.
"In addition, we have seen positive customer uptake of our major new software releases, with several customers adopting these ahead of Christmas trading. Meanwhile our SaaS model saw further success with the award of a new contract from Heidi Klein, who also adopted Prologic's new Up&Running rapid implementation methodology."
The directors are not proposing an interim dividend.
"Management is now focusing on securing additional resources to further strengthen the company's prospects and to this end we have today announced a strategic review of the business."
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