CommSoft offers no promises on profits

CommSoft managing director Mark Lunt won't be drawn on when the financially troubled software developer will return to profitability.

CommSoft managing director Mark Lunt won't be drawn on when the financially troubled software developer will return to profitability.

For the year to June the company, which sells telephony products and customer management software, made a $21.8 million loss, $17.3m from operations and the rest from asset write-downs. Since then the Auckland-based company has shed two-thirds of its staff and instituted other changes, says Lunt.

"Obviously there are things we're doing in terms of running a tight ship and having far less costs," says Lunt, "but there comes a point where profitability and success are determined by how successful your sales are."

Lunt says there were "problems" in the revenue and collection sides of the business, especially in the UK, "so we introduced much stronger revenue recognition policies -- the business is much stronger now, but we still have a battle ahead."

An additional source of revenue may be the company's distribution deal, announced this week, with US call centre software developer Sension. However, Lunt isn't making any promises of big sales.

"We're taking a pragmatic view -- we're not going to say if we don't sell $10 million worth in the first 12 months it's a failure."

The deal involves Sension distributing CallMaster, CommSoft's phone call monitoring product and NetMaster, its internet use tracker.

Lunt is the first to admit many New Zealand companies have failed with distribution deals overseas, but says Sension's experience in the telco software market and its established reseller channels give the deal a stronger foundation.

The deal was struck in December and the two companies are working through the details, he says. The company has not yet sold any products in the US.

Lunt doesn't believe the growth of IP telephony is a threat to CallMaster, a PBX-based product, "because we have the capability to analyse voice and data at packet level".

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