PracticeConsultingBaltimore admits revenues overstated

Baltimore admits revenues overstated

Internet security company Baltimore Technologies today had to dampen news of a revenue increase for 2001 with an announcement that it would have to restate its accounts for 2000.

After a further review with auditors KPMG, unaudited revenues for the three-month period to 30 June 2001 were up £1m to £16.5m on the £15.5m reported on 5 July 2001, according to a company statement published at the London Stock Exchange.

But, the Dublin-based software company had to report an overstatement of revenues in the India, Middle East and Africa regions ‘due to incorrect contract classifications – and a direct result of the actions of a limited number of employees’.

The restatement will result in a 5.5% drop in revenues for the 12-month period ended December 2000 from £74.2m to £70.1m. It will also affect the three-month period to 31 March 2001 by 3.4%, a drop from £23.7m to £22.9m.

The company said this would not adversely affected the results for the three-month period ended 30 June 2001 or the cash position.

Peter Morgan, chairman of Baltimore, said: ‘The board was very concerned to discover the incorrect contract classifications and together with the company’s auditors the board has immediately taken appropriate steps to investigate the circumstances and to restate these historic revenues.

‘Whilst we regret these findings, we are confident that we are now able to draw a line under the past.’

Baltimore will announce results for the second quarter and half year on 22 August 2001. It will also present its business restructuring plan.

Morgan added: ‘The additional controls, systems, policies and procedures implemented by Paul Sanders since his arrival [as chief financial officer and acting chief executive] at the company have ensured that we discovered these issues and dealt with them in a timely manner.’

Former finance director of SSL International, Sanders became and acting chief executive at Baltimore in July after the resignation of founder Fran Rooney.

In a separate case, KMPG forensic accountants are investigating SSL over an overstatement, which occurred during a period when Sanders was finance director.

Links

CFO Sanders steps up at Baltimore

KPMG probe £50m stock error at SSL

Baltimore Technologies in FSA probe

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