Sausage Software Ltd. is remaining optimistic despite registering an interim net loss of around A$211 million (US$106.6 million).
Back in January, Sausage notified the market that it would be writing down A$190 million in goodwill and non-performing assets, a move that has made a hefty impact on the company's half-yearly results.
According to a statement to the Australian Stock Exchange, a number of acquisitions made by Sausage in the previous financial year suffered from poor integration processes, leaving some products to stagnate and become virtually worthless.
"The rapidly changing and highly competitive nature of the space in which Sausage operates is such that products can become technically obsolete before generating any return, and many products acquired have indeed proven to be obsolete or incapable of generating a positive return," read the statement.
Sausage attributed this to bad management, rather than bad luck, but was quick to point out that the executives responsible for the decisions have since been replaced by a new team, which, the statement points out, is driving the company towards profitability.
"One of the first tasks of the new management team was to catalogue and then commercially evaluate all products and service capabilities within Sausage," read the statement, which went on to note that a process of rationalization had taken place, resulting in "significant once-off costs".
Also impacting heavily on the write-down was the value of the goodwill associated with the company's acquisition of SMS Consulting Group, which contributed A$150 million to the total.
Despite revenues being up from the corresponding half, from A$17.3 million to $75.4 million, Sausage wasn't happy with the minimal growth, falling back on the Olympics and the general sales tax as factors that stifled revenues.
When announcing the write-downs in January, CEO Lloyd Roberts said "we have made the tough decisions up-front. The complex task of integrating the businesses is complete and we are now positioned strongly for the rest of the year."
"The company will continue the process of consolidating business operations and focus on achieving sustainable profitability," read the Sausage statement, with the directors being of the opinion that while there remains much still to do, they can be optimistic about the future based on the sound underlying business.