Prodacta AG
Ad hoc-Service: Prodacta AG 3 monthsn stateme
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Results affected by sluggish product sales
Ettlingen, 24 May 2000 – Sales revenues for the first three
months of fiscal year 2000 are considerably lower than
expected. Total revenues stood at DM 7.8m (DM 7.4m for the
previous year), which amounts to a five per cent increase, as
opposed to the 50 per cent gains achieved during the same
period last year.
The relatively low revenue figures are largely due to sluggish
sales within the company’s activities as a product vendor,
which has resulted in a shortfall of DM 2.7m. Owing to the high
margins within the licensing business, this has impacted on
Prodacta’s earnings situation. Earnings before depreciation of
investments slipped from DM -1.3m in the first three months of
the previous year to DM -5.7m in the current year.
There were several influencing factors that led to the products
not being marketed as successfully as anticipated. An
independent trading company, designed as a new sales channel
within the Prodacta Group, was to be established in order to
market the company’s own products – particularly those of
valuesoft GmbH – as well as third-party products. In order to
achieve this objective, the sales team of a well-known reseller
was acquired by the company on 1 January 2000. Its main
responsibility was to establish and manage the new distributor.
The Q1 revenue targets put forward by the management of the
newly created, independent trading company were not attained.
This prompted the Board of Management of Prodacta to close the
distributor on 30 April 2000, thus minimising losses created by
the venture.
Another reason for the shortfall in sales was the sluggish
market environment in terms of ADSL technology, GATELAND’s main
area of expertise. The expansion of the ADSL network throughout
Germany – as announced by Deutsche Telekom – is behind
schedule, which in turn means that this technology is failing
to capture market share.
Following the Y2K-related slump in sales towards the end of the
fourth quarter, the services sector has not been able to
accelerate growth to a satisfactory level. Delays of two to
three months with regard to orders from key accounts have been
a major determinant.
Prodacta’s services portfolio will undergo a critical analysis,
as will the company’s infrastructure. One of the main
objectives in terms of the range of services offered is to
reduce the inherent level of complexity within this area, thus
allowing Sales, Marketing and Public Relations to develop the
market in a more efficient and targeted manner. When it comes
to infrastructure, measures are to be taken that will reduce
overheads. The efficient use of commercial premises will also
be addressed – e.g. the establishment of home offices for
consultants and the sublease of empty office space.
In addition to direct selling of the company’s products and
services, Prodacta will also place great emphasis on
establishing and maintaining long-term partnerships, e.g. with
Siemens Business Services or Fujitsu Siemens. Several large
projects within the area of eCustomer Care, which had been
postponed from Q1 to Q2, are now in the first stage of the
implementation.
A recently developed software version produced by GATELAND
allows users to upgrade their secure Internet access to a
multifunctional telematics server – an office straight from the
socket, with an integrated fax and answering machine, as well
as the possibility of Web-based telephony. The product features
of this new software are such that it can also be positioned
within the ISDN market, which is larger than the ADSL market.
In order to further enhance promotional activities for the
product, a special product portal at www.gateland.dewill be set
up on 1 June 2000, with an integrated eCommerce system.
Following the resignation of the Chairman of the Management
Board Herbert Uhl, the Supervisory Board sees the appointment
of new members of the Board for the areas of Sales and
Technology as one of the most pressing matters. In the
meantime, the Management Board has been strengthened by a
temporary appointment. In view of the difficult conditions, the
company is expected to review its projected figures for fiscal
year 2000 and the following years.
End of Message
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