Trintech's losses down though market still tough

Trintech, the Dublin-based software company, said losses narrowed in the first quarter although market conditions remained difficult with continued softness in information technology spending, writes Jane O'Sullivan, Markets Correspondent

Company chairman and chief executive Mr Cyril McGuire said the firm, which provides e-payments technology, was "very, very close" to profitability.

"We are confident a profit can be achieved in the near term," he said, adding the company expected to move back into the black sometime this year.

Trintech reported a pre-tax loss of $670,000 in the three months ended April 30th, down from a loss of $11.4 million a year earlier. The net loss per American Depositary share (ADS) declined to $0.06 from $0.29.

First-quarter revenue rose by 2 per cent to $10.2 million from $10.1 million in the year-earlier quarter. Product revenue was up by 43 per cent to $2.6 million year-on-year, software licence revenue rose by 6 per cent to $5.5 million while service revenue fell by 30 per cent to $2.1 million.

However, on a quarter-on-quarter basis, revenues were down, reflecting the continued difficult trading conditions.

The company continued to make progress in reducing its operating expenses which fell by 30 per cent to $6.7 million, the ninth consecutive quarter in which it had declined.

Mr McGuire described the results as solid in "what continues to be a difficult macro-environment".

"Our main concern continues to be right-sizing the company for future growth and returning to profitability in the near term," he said.

Trintech now employs 353 people in five locations, a level Mr McGuire believes is sustainable.

"There is no significant scope for further substantial cost reductions. It's now a revenue game," he said, pointing to the group's emphasis on research and development, on new markets and exploiting indirect sales channels through partnerships.

It has also reduced its heavy reliance on the hard-pressed German market, spreading its sales to Spain, the Netherlands and Britain.