Cognotec moves towards profitability

Cognotec has been reducing its losses and increasing revenues in the past couple of years and it hopes to become profitable towards the end of 2003, according to its CEO Brian Maccaba.

Cognotec has been reducing its losses and increasing revenues in the past couple of years and it hopes to become profitable towards the end of 2003, according to its CEO Brian Maccaba. Irish company Cognotec is a provider of foreign exchange dealing and connectivity solutions.

The company had a pre-tax loss of $3.9m (€3.9m) in the six months ended May 31, 2002 down 75% from the loss in the previous first half year. Revenues were $10m (€10m), up 28%.

CEO Brian Maccaba said strenuous efforts had been made to cut costs and staff numbers had been reduced. He said that the company's customers included 60 banks in 21 countries, including the top two banks in Japan.

The countries where it did most business were Germany, Switzerland, Japan and the US. Tied in the with the increase in revenues had been an increase of 1000% in the transactions undertaken by customers in the past 18 months.

Mr Maccaba also showed how the company's revenue mix had changed in the past couple of years. In the first half of 2000 around 76% of the company's business had come from on site/licence revenue with transaction revenue making up 13% of its business. For the first half of 2002 on site/licence revenue had shrunk to 31% of its business and transaction revenue was down to 9% of its business. The growth areas had been in professional services ( now 21%, up from 0%) and in service fees (now 39%, up from 11%).

While the company had done well, growth had not been as great as it had forecast two or three years ago, due to market conditions and the market in the middle of this year in particular had been very slow.

Altogether the company has raised $75m (€75m), and about $25m (€25m) of that had been spent on research and development. Investors include Japanese bank Softbank and Fin Ventures, the private equity arm of Standard Chartered Bank.

The company is shortly to go to market with new technology.

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