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TrigoldCrystal faces “imminent need of rescue”

  • 06/12/2010
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TrigoldCrystal faces “imminent need of rescue”
TrigoldCrystal is in increasing need of rescue after seeing its turnover plunge by 55% since Trigold merged with Crystal Software Solutions in 2009, it has been claimed.

Accounts for the TrigoldCrystal Group show that its turnover has fallen by more than half to £5.8m, while its operating profit has plummeted 93% to £310,000.

In addition, it has an outstanding loan of £2.9m, for which it must make yearly repayments of £750,000 plus interest.

However, TrigoldCrystal has strongly refuted any suggestion that it is in trouble and seeking rescue.

Nevertheless, an industry source close to the sourcing systems market said that TrigoldCrystal’s position means that a takeover will soon be required: “It is such a shame that this has happened. Trigold’s core business is good, but everyone knows it’s got issues and has suffered during the downturn of the housing market.

“What Trigold needs is a white knight to come in and rescue it, because it has done so much for the market and it would be a real loss to the industry if it were to go.”

Records show that, upon their merger, Trigold and Crystal Software Solutions had a combined turnover of £12.814m and an operating profit of £2.707m.

Yet, for the year to 30 November 2009, TrigoldCrystal Group’s turnover had fallen to £5.824m with operating profit down to £310,926.

However, Martin Colyer, joint chief executive of TrigoldCrystal, strongly denied that the company was in trouble, saying it had restructured early to give it a secure future.

Colyer said: “We have survived remarkably well. Yes, turnover is down, but we have reduced our cost base and restructured our loan over a four-year basis. This has given us real security, as the previous arrangement meant we had to renegotiate the deal every 12 months.”

He added: “The company has resized, but we have positive cash flow and reasonable debt. We had exceptional costs related to redundancies and restructuring in 2009, which mean the 2009 results do no represent our ongoing earnings. While our subscriber numbers are down, our customers are up.”

TrigoldCrystal currently has 62 employees and a subscriber base of 17,000, down from 25,000 at the end of 2007.

Colyer said: “TrigoldCrystal is in a strong position despite the ravages of the market.

“We do not need rescued.”

By comparison, TrigoldCrystal’s closest rival, Mortgage Brain, has seen its revenue fall far more modestly.

For the year to 31 March 2008, Mortgage Brain had a turnover of £7.378m, with an operating profit of £53,716. Two years later, its turnover had reduced to £5.906m with operating profit up to £275,433 and £2.808m of cash in the bank.

Past unconfirmed rumours have suggested Trigold was in takeover talks Mortgage Brain. Mortgage Brain chief executive Mark Lofthouse said he would not comment on market speculation.

However, he added: “Mortgage Brain has grown its market share in all areas during the downturn, invested substantially in products and we have a secure future ahead of us.”

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