What used to be the biggest promise in the Forex software platform development field is for years now considered a sinking ship. A few days ago the worst fears were confirmed when it was announced that Cognotec is heading into a receivership. Barclays Bank which is owed millions by Cognotec appointed Dublin’s KPMG as a receiver.
Founded in 1991 Cognotec is a global provider of leading-edge FX trading and connectivity solutions that enable financial institutions to deliver customised, real-time, electronic trading services to their clients. Cognotec boasts over 100 deployments in 26 countries, most of them tier 1 and tier 2 banks and financial institutions.
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Cognotec was never even close to being breakeven and couldn’t establish a healthy and growing P&L traction. Having consumed over $100M in investments since its inception and valued as high as $286 back in the dotcom boom days it finally posted a profit in 2005, if only for a year. In 2007 Cognotec lost almost $10 million before taxes but was able to reduce the losses to $1.76 million in 2008. Revenues however kept plummeting as well: from $28.1 million in 2005 to only $18.5 million in 2008 during which a client has cancelled a project responsible for over 60% of Cognotec’s revenues. 2009 was probably even worse.
Cognotec is headed by Brian Maccaba a somewhat eccentric Irish born businessman.
However perhaps not all is gloom and doom in the Cognotec arena: Profit and Loss announced yesterday that Cognotec might still be able to meet its loan obligations as it expects to complete an investment round shortly.