CommSoft Announces Further Board Changes

CommSoft Announces Further Capital Raising Board Changes

CommSoft Group Limited (ASX/ NZSE: CSG) today released its financial results and Annual Report for the year ended 30 June 2002. The results were as per the Appendix 4b released in September and show that in the period CommSoft reduced its losses by 70 percent compared to the previous (15 month) period, from A$21.8 million to A$6.4 million.

Commenting on the result, Managing Director Mark Lunt stated: “At the start of the year CommSoft was a company with a strong product set but without a management team or effective distribution channels to effectively bring the product to market. The past financial year was about consolidation: shedding unnecessary costs, shutting down terminally loss-making operations and putting a new management team in place. These initiatives are now complete and, as a result, financial performance has improved every month for the past nine months despite the very tough trading environment. While CommSoft still has its work cut out to reach profitability, management are confident of further improving on last year’s performance.”

CommSoft has also successfully completed a further round of capital raising, bringing in $460,000 of additional working capital via a placement of Ordinary Shares and Convertible Notes to a number of new and existing investors. Interests associated with the Group’s current Chairman, Mr Trevor Kennedy, committed further investment in this round of funding, subject to shareholder approval at CommSoft’s Annual General Meeting, which is scheduled to take place in Sydney on 29th November.

“CommSoft has continued to make progress despite very tough market conditions and this latest successful fund raising shows that new and existing investors have confidence in the company and its plans,” comments Mr Kennedy. “We have recently completed a thorough review of our operations and are working to a plan that will ensure we achieve our short term goals of positive cash flow and resultant profitability. This will be achieved by a continued focus on costs and some very specific revenue generating initiatives that are already being pursued.”

CommSoft’s management continues to work closely with its UK distributor, Techtel Group, which is reporting a strong upturn in sales after a quiet Northern Hemisphere summer. Techtel recently signed a revised distribution agreement intended to improve the cashflow receipts to CommSoft. The company anticipates stronger cash flows from this key market as a result. CommSoft’s new South African distributor also reports improved trading conditions.

Trevor Kennedy announced his intention to step down from the role of non-executive Chairman at the end of October having assisted the company with its successful fund raising. Mr Anthony Howard, currently a non-executive director of the group, will assume the role of interim Chairman from 1st November.

Mr Kennedy says, “After having to focus much of our attention on governance, compliance and funding work over the past few months, we now must focus exclusively on driving revenue initiatives and the operational aspects of the business. Mr Howard is based in Auckland and with his many years experience in the IT sector is better placed to provide support to our management as they push hard on the revenue initiatives we have put in place. I retain a large shareholding in the Group and am confident that the Board and management will continue their excellent work and build on the progress made over the past year.”

Chairman designate Anthony Howard adds: “We are very grateful to Trevor for his continuing support of the company and as he says our goal now is to concentrate exclusively on the operating aspects of the business. We have a solid management team and the Board is confident the improvements in our performance will continue, in fact we believe they will accelerate strongly.”

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