Pineapplehead restructures and divests

Pineapplehead restructures and divests

ASX-listed technology company, Pineapplehead, has announced a restructure that includes a name change, two acquisitions and the successful divestment of its sports graphics business.

CEO, Evan Kourambas, told the Pineapplehead AGM late last month that the company was changing its name to Lako Pacific and was now trading under the ASX code LKP.

The new moniker reflects the organisation’s consolidation back to its heritage core competencies of niche distribution, where it all started under the original trading name of Lakovision.

Kourambas said that about three-quarters of the $10.5 million it netted from the June 2000 float had been eroded away to $2 million in cash and $1 million in working capital for the listed entity.

The Pineapplehead sports graphic software development business was sold in June this year to New Zealand sports business, Virtual Spectator, after it didn’t meet expectations, he said.

“The Pineapplehead name and trademark has been sold,” Kourambas said. “We made a decision at the board level to focus on distribution which was the only side of the business that was actually making money.

“It is a genuine boutique distribution operation that always has been and continues to be profitable. I am confident there is a strong future for the company as it stands now.”

By contrast, Lako Pacific bought a Queensland distributor, Idea Media, during the 2002-03 fiscal year while it also bought and sold — at a loss — a company called Future Reality, which sold high-end post-production film editing hardware and software. Kourambas said the company was now financially stable.

“Our sales are currently on track to achieve $10 million for the 2003-04 financial year,” he said. “We have a market capitalisation of $3 million and there is $3 million in cash and working capital. We carry no debt and expect to achieve a maiden profit this year so things are looking up.”

Lako Pacific currently works a niche based around multimedia capture, production and distribution software and hardware but intends to expand into new areas. It currently has distribution agencies for Pinnacle Systems, U-Lead, ACDSee, Viewcast and Vine Micros.

Kourambas said its competence lay in launching products, brand position management, product support, logistics, sales, marketing and administration. It sold to sub-distributors in all states as well as directly to retailers such as Harris Technology, Harvey Norman, Dick Smith Powerhouse, Officeworks and Megamart, and those in cameras and home entertainment.

The company has also had some success selling Big Blue pre-paid ADSL Internet products in discount retail stores such as K-Mart and Big W.

It recently introduced the German-based Dicota brand of bags, portable peripherals and accessories to compete directly with suppliers such as Targus.

Kourambas said this was a $28 million market in Australia, of which Lako Pacific wanted at least 15 per cent.

The company’s shares were launched at $0.50, the stock then rose quickly to a high of $0.98 before falling below the $0.10 mark in March 2001 where it has stayed ever since.

It fell to a low of $0.03 a share but has since recovered slightly and is currently trading at $0.05.

“It’s been a tough couple of years but we are now ready for growth,” Kourambas said. “We have been through a restructure, we are cash positive and we are still here. Others are not.”

He did not write-off the possibility of future acquisition by Lako Pacific or it being acquired by someone else.

“We are always open to potential ways of adding value to what we are already doing,” Kourambas said. “We are looking at a couple [of acquisitions] at the moment, while the beauty of being a small listed company means we have the chance to move into all sorts of new areas if somebody wants to make a capital investment.”

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