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Commander turns attentions to Ipex

Commander turns attentions to Ipex

As Commander deliberates the fate of its Ipex PC business, the industry is increasingly questioning the future of whitebox players. According to IDC, whitebox market share in Q2 was 27 per cent, a drop of 5 per cent year-on-year. It was an 11 per cent drop from Q2, 2004. During their heyday, local builders accounted for half of the Australian PC market.

The demise of several notable assemblers during the past 12 months - including BCN Technology, Microbits and Omega Technology - has highlighted the strain local players have been under. The multinationals, particularly Acer and Dell, have aggressively targeted the whitebox heartlands of government and education.

Commander CEO, Adrian Coote, said Ipex had not been a priority during its three-month integration of Volante because it was run as a separate entity. However, the national reseller would now review the business.

"We looked at the business [Ipex] initially but it was running quite well and had no integration potential," he said. "The most important thing was to bring the major organisations together."

Coote said Commander would investigate several options, including selling Ipex, but stressed commitment to the brand.

"Selling [Ipex] is something we will look at, at some stage, but we do have local manufacturing requirements under some of the major government contracts. We don't want to put those customer relationships at risk," he said.

Commander could look at outsourcing its Ipex operations to a third-party, Coote said, but was also assessing the viability of other assemblers use its large assembly plant in Victoria.

Optima CEO, Cornel Ung, said he had not been in contact with Commander but could be interested in picking up the Ipex business.

The Ipex review follows the release of Commander's preliminary full-year results to June 30. Revenues rose 28 per cent to $790 million, including Volante sales, but net profits fell 8 per cent to $28.9 million.

Coote attributed the fall to network and back-office infrastructure investments, as well as the integration of Volante. Restructuring costs, along with a one-time equipment write-off for Volante's G8 contract, had shaved $2.9 million off the bottom line.

He pointed out that Commander had increased revenue and gross margins across all five business units - network services, data hardware and services, voice hardware and services, SME and enterprise.

Coote said Commander had increased revenue and gross margins across all five lines of its business units. These are: network services, data hardware and services, voice hardware and services, SME and enterprise.

Data was a key contributor to its bottom line, with revenue increasing from $217 million to $258 million. Gross margins across the unit rose from $39 million to $45 million. Voice hardware and services also experienced solid growth, with revenue jumping from $145 million to $160 million and gross margins rising from $69 to $73 million.

As a result of the latest figures, Commander forecast revenues for the 2007 financial year would hit $1.1-$1.2 billion, with underlying EBITDA of $95-$101 million.

Coote said its new managed services offering, which was developed off the back of its Volante purchase, had helped to its market position and sales in that space. The launch of the Commander Centre franchise business was also providing a stepping stone for growth in the lower end of the market.


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