The Horizon Technology group yesterday reported a €21.53 million operating loss in the six months to December 31st, 2001, citing poor market conditions in the Republic and Britain, writes Arthur Beesley

The half-year loss compares with an operating loss of €16.42 million in the year to June 30th, 2001. The group, which cut its staff to 390 from 720 last May, said its underlying financial performance was satisfactory but added that conditions in the market remained difficult.

Executive chairman Mr Samir Naji said: "A number of indicators suggest that the environment has reached the bottom of the cycle particularly in the UK and, as a result, the group is cautiously optimistic that modest growth can be achieved in the current year."

The operating loss from continuing operations in the last half-year period was €11.35 million.

The loss on discontinued operations was €2.8 million, with an additional €7.6 million spent closing down certain divisions.

Horizon moved this month to close its i-fusion application service provider division, stating that it could take some time for the operation to become profitable.

This followed the closure last month of parts of the group's internet services division. Horizon also closed its internet transaction business, Commerce Net Trading International, last December.

The group said a "comprehensive and fundamental restructuring" was now complete, with quarterly cost structures down to about €10.5 million from €17 million.

Earnings before interest tax depreciation and amortisation (EBITDA) in the second half last year were €148,000. When discontinued operations were stripped out of the results, EBITDA was €1.9 million. The group said its gross profit margin was 17 per cent, 0.4 points stronger than the 16.6 per cent margin in the first half of the year.

Davy Stockbrokers' Mr Barry Dixon said the results reflected Horizon's need to control its cost base as the market deteriorated last year. Goodbody Stockbrokers analyst, Mr Gerry Hennigan, said the group was positioning itself for recovery expected at the end of the year.The basic earning per share was -30.62 cents in the period. With only thin volumes of the stock changing hands, Horizon's shares closed unchanged at €0.40.