Freshtel forecasts $1.25m loss
- 22 February, 2010 15:45
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ASX-listed VoIP telephony provider, Freshtel Holdings (ASX: FRE), has announced substantial changes to its business structure and forecast continued losses for 2010.
In a statement to the ASX, Freshtel said it had dropped an open source platform in favour of a VoIP offering provided by Cloudware and had reached agreement with Vixtel to market an end-to-end PBX solution.
The company has also relocated from South Melbourne to Prahran in Melbourne's inner suburbs in a move it claimed had "greatly reduced office rent and outgoings".
"Freshtel has incurred significant losses on its UK activity and agreement has now been reached with Tesco in the UK to terminate the service agreement under which Freshtel provides services to Tesco," the statement reads. "This has allowed a further reduction in costs and removed the need to continue to support the operating platform. Sean Wilkins, from Tesco has resigned as a director of Freshtel and we have appointed Ken Carr, former CEO of Keycorp, as director to replace Sean."
The moves have allowed the embattled company to reduce head count and expenses by $150,000 per month.
The company is forecasting continued losses for the year, however, with an expected operating loss and cash deficit of $1.25 million on monthly losses of $30,000 to $35,000.
It also hinted at being open to being picked up by a bigger competitor, saying its circumstances "may be attractive to some of Freshtel's larger more profitable competitors".
Freshtel announced the appointment of Dr Allan Sullivan as non-executive director and chairman in May last year.
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