IT&e drops distribution for tight services focus

In its continuing struggle towards profitability, listed IT services provider and product distributor IT&e has decided to sell its distribution business and concentrate instead on "pure e-commerce and IT services". The move was announced after the company released its results for the second half of 2000, showing it lost $A13.8 million on total sales of $A23.3 million.

The company's Microarts PC business, which lost $A2.3 million, has already been closed and now IT&e is working to return its distribution division to profitability before selling it to a complementary operation. The distribution business lost $A2 million in the last half of 2000.

The attraction of the e-commerce business is not difficult to understand. A spokesman for IT&e said that in 1999 the e-commerce business that IT&e then acquired was generating revenue of $A2 million, which has increased dramatically and is expected to hit $A12 million this financial year. In the last half of 2000 the e-commerce division made a profit before tax of $A1.2 million and the enterprise solutions division made a slight profit.

In order to expedite its plans for the future IT&e is looking for a capital investment of between $A2 million and $A3 million.

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