By Phil Boeyen, ShareChat Business News Editor
|
Friday 10th August 2001 |
Text too small? |
ITC put A$1 million into Streamlink in April but the company went into voluntary administration at the end of last month, revealing it had not signed any deals since October last year.
ITC boss Jeff Dittus says although disappointing, the investment is relatively small as a percentage of shareholders funds at just under 5%.
"IT Capital invested A$1 million into this company in April as part of an A$2 million commitment, with the second tranche subject to certain performance milestones.
"We decided not to invest the second half of our commitment because the company failed to achieve the milestones that it agreed to when we initially committed to fund the company."
Mr Dittus says IT Capital's money was earmarked to accelerate the sales and marketing efforts of the company to help expand the revenue base of an e-procurement software package that had over $6 million spent on its development, and had Coca Cola Amatil as its largest customer.
"At the time, a multi-million dollar backlog for the product was verified. Unfortunately, almost all of that backlog did not come to fruition.
"The customers that we contacted during due diligence had either deferred their orders until next year, decided not to install the solution indefinitely, or in the rare instance, adopted a competitor's solution."
Mr Dittus says the company is still reviewing its options over the investment and the likelihood that it will receive any proceeds from the administrator.
ITC says its other portfolio of companies is doing well, with Virtual Spectator recently signing a contract for another sailing event, the Volvo Ocean Race, which starts in September 2001.
The company reports the monthly revenue rate for its Deep Video Imaging investment is accelerating and Terabyte Interactive is coming along solidly after a difficult year.
"They have reduced their burn rate, and the order backlog is picking up," says Mr Dittus.
ITC says its current cash balance is around $6.5 million, enough to support its portfolio companies in the medium term although it is looking at a possible capital raising strategy which may include a rights issue.
The board and management of ITC are expected to come in for a grilling from shareholders at the annual general meeting in Auckland on August 31, partly because the company's share price has fallen by around a third since the start of 2001.
Payments to Mr Dittus and former MD Keith Phillips are also expected to cause comment.
The remuneration attracted media flak this week after it was revealed in the company's written annual report that Mr Dittus was paid $908,616 last year and Mr Phillips received $473,616. The combined remuneration of $1.382 million equals around 6% of the company's current market capitalisation.
Mr Phillips, who left the company in May to set up his own business, was recently appointed to the board of Cadmus Technology (NZSE: CTL).
No comments yet
