IT&e counting on credit crunch20 May 2008 | The Australian...

IT&e counting on credit crunch
20 May 2008 | The Australian Financial Review | Michael Crawford with Ben Woodhead

Geoff Lord-backed risk management software maker IT&e is banking on turmoil in global financial markets to pull the company out of its long running losing streak. It&e hasn’t turned a full year profit since 2002, but chief executive James Maranis said the opportunities had increased dramatically since the credit crunch. The company was building its operations overseas to reverse a disappointing few years for its investors. Which include Mr Lord’s UXC group and finance software maker GBST. “We are creating the sales infrastructure in areas where we haven’t had people to sell, like parts of Europe and some parts of the US,” Mr Maranis said. “We already cover continental Europe, the Africas and Asia well.” “Risk systems are being aligned to trading systems – no one planned the credit crunch but all factors are lining up for us. “Our biggest challenge is to boost our global sales team, which is what we are working on at the moment.” Mr Maranis said markets played to ITE strengths as it worked to drum up sales of its Razor Risk Management software package. In the past year the company has locked up wins with the Royal Bank of Canada and London Clearing House Clearnet Group. There were also hints of a turnaround in ITE’s first half result when it posted a doubling of revenue to 8.1 million and pared back the net loss to $625,000 from $4.9 million in the previous corresponding period. But the company’s financial performance has ebbed and flowed over the past few years – a pattern Mr Maranis attributed to delays in the signing of contracts. But he was optimistic the company would land two deals it had in the pipeline by the end of this financial year, helping it meet a second half revenue target of $7.6 million. If ITE achieved that goal, 2008 would represent its best financial performance in years with regard to sales, although he said the company was between 6 and 12 months behind where it had planned to be. A Queensland Treasury Corporation online lending and investment system project that was dumped last year didn’t help the software maker’s cause. According to Mr Maranis, the reason behind the QTC’s decision to not go ahead was largely to do with scope changes. The cancellation was based on QTC’s requirements, and it was not like they did not like our implementation he said. The cancellation was purely on design specifications. I imagine the amount of money QTC spent on external consultants became bigger than they anticipated. Disappointments such as the axing of the qtc deal mean a number of backers have abandoned ITE’s share register. The company once boasted investors such as paper king Richard Pratt’s Thorney Investment Group, Opis Capital and JM Asset Management. Now the biggest names on the books are GBST and UXC, which has reduced its holding from about 21 percent to 10.57 percent as of last week. UXC bought into the business at about 12 cents per share and made a tidy profit when it started to sell down its stake in late 2004. But the investment is now under water as ITE share price has bobbed about the 6 or 7 cent level in the last few months. Mr Maranis said things were looking up, the pipeline for ITE had improved and the credit crunch had put between 10 and twenty deals in the works.
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