Peachtree loses $2.7 millionFriday 22 June 2001
Peachtree loses $2.7 million
Online-grocery specialist blames soft results on growing pains
ANDY RIGA
The Gazette
Peachtree Network Inc. prides itself on not being one, but financial results it published yesterday look a lot like those of a dot.com: it lost $2.7 million on sales of $852,000 last year.
The Montreal firm, a provider of technology and services to grocery stores that sell on the Web, blamed the sizable loss on efforts to perfect its technology, including systems that allow stores to fill several orders at once.
The results are for the fiscal year ended Jan. 31. The company waited the full 140 days permitted by law before making them public.
"We are now seeing the fruits of our labour pay off because we're actually at the point where we're signing the big contracts as a result of that technology being proven," said Neil Bienstock, vice-president (operations).
Peachtree has signed deals with IGA stores in Quebec and Intermarche, a major European grocer, he noted.
The low sales figures for the year are actually inflated by the way Peachtree accounted for revenue.
Of the $852,000, more than 85 per cent is money actually paid by consumers to retailers - cash that never reached Peachtree coffers.
The company also charged retailers development fees and got a cut of sales.
Bienstock said Peachtree accounted for grocery sales achieved by its participating retailers because, at the time, the company was being compared with rivals like WebVan and Grocery Gateway, which pick, pack and deliver groceries from their own warehouses.
In subsequent results, Peachtree will report as revenue only money that comes in for its technology and services, he said.
First-quarter results are expected by month's end.
Peachtree isn't a dot.com or a grocery retailer, Bienstock said. "We are an information-technology company servicing the grocery-retail industry." As such, it is well placed to cash in on the Internet, even as online grocers like WebVan struggle, he added.
Last year's financial results don't include those of myButler.com, an acquisition that closed in May.
This year, the firm plans to use technology from DXStorm.com, another company it is acquiring, to help it enter new retailing areas, including pharmaceuticals and hardware.
Peachtree employs 38 in Montreal. DXStorm, based in Mississauga, Ont., has 16 employees.
Peachtree's shares closed at 75 cents, unchanged, on the Canadian Venture Exchange yesterday. The stock soared as high as $3.65 after its March 2000 initial public offering at $1.