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Debtors take shine off CommSoft result

By Phil Boeyen, ShareChat Business News Editor

Monday 18th December 2000

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Newly-listed telecommunications software company, Commsoft (NZSE: CSG) has made a A$700,000 provision for doubtful debts in its maiden interim result but is confident it will get the outstanding money back.

The company, which on Friday was suspended from trading on the ASX for not filing its interim report, posted a net profit of A$311,000 for the six months to the end of September.

Commsoft made losses on its Australian and New Zealand operations during the period, but booked profits in South Africa and the UK. The UK accounted for the majority of the company's revenue too, taking in A$4.197 million from total operating revenue of A$6.6 million. UK profit was $413,000.

An exchange gain of A$399,000, primarily due to favourable rate gains in UK debtor balances, was offset in abnormal items by the provision of A$700,000 for doubtful debts.

While the directors say the level of trade receivable collections for the six-month period has been unsatisfactory they believe the balances are fully recoverable and the provision is a "prudent approach when the company has had a limited trading history with its customers".

The company says highlights for the period included its September IPO, which raised A$11 million, the introduction and rollout of NetMaster, its proprietary internet management tool, and the signing of substantial distribution agreements in the New Zealand, Australian, South African and UK markets.

At the end of September CSG had total assets of A$28.4 million.

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