SME outsourcing and computer telephony integration (CTI) firm, Iocom is shedding its recently acquired software arms and undergoing radical restructuring in an effort to refocus and stem its significant cash burn rate.
Iocom shares have been in free fall following its spending spree mid-last year when it purchased UBSP software group, including FullCRM and Atura as well as MUA Distribution and its wholly owned services and technology subsidiary, MUA Services and Training (MS&T). Iocom shares were trading at 17 cents yesterday, down 78 cents from their November high last year.
Iocom managing director Peter Singer says the company will drop the FullCRM business altogether while Atura will be severely scaled back. The CTI group will also be seperated from the MUA distribution business.
CTI is being targeted as the company sweet spot, not to mention the lifeblood for future survival. Iocom is launching its new CTI offering today which, according to Singer, will succeed were Telstra failed.
When Iocom purchased MUA and FullCRM last year, Singer predicted the acquisition would increase 2001 revenue by approximately $25 -- $32.56 million. However, by December, Singer was forced to concede to shareholders that the acquisition, combined with a failed 700-seat outsourcing contract, would drive the company into the red by December 31, 2001.
Singer issued a statement to the ASX yesterday in an effort to calm the jangled nerves of investors and prove the company's future viability. He stressed that, despite carrying a debtor's book of approximately $1.8 million, Iocom has no material debt -- the $1.8 million is made up of creditors and leases that are clearly being met.
In addition, Iocom has in excess of $2 million in inventory and four key divisions with intellectual property of significant value, says Singer. Combined, these factors will see Iocom cashflow positive by 30th June 2001.
Meanwhile, Jon Brett has resigned as company chairman and Sam Saboune has been appointed chief financial officer of the group.