Facing a substantial operating loss in the last half year, technology services company Iocom has called in Geoffrey Hill, a merchant banker, to help it restructure its activities. Peter Singer has resigned as both CEO and director "for personal reasons", and Jon Shieman, Iocom's COO/general manager, has joined the board in an executive capacity. The board is also searching for a non-executive director with expertise in corporate governance and for a chairman.
"It has been a difficult first half to the financial year, especially with acquisition/consolidation issues and the non-performance of the software group and its venture into the United States," a spokesman said. Iocom has not yet released its results for the half, but they are expected to show a loss of almost $A4.5 million on revenue of about $A5.5 million.
The operational restructuring has been undertaken to allow the company's core business -- Iocom Solutions -- to focus on outsourcing and systems integration for SMEs, the spokesman explained. Iocom Solutions has carried administrative costs for other divisions of the company and was "cash flow negative during the last quarter", he added. "It is forecast that this division will be cash flow positive before the end of the financial year."
The MUA Group, which Iocom acquired last May, is being wound down after failing to show a profit, and Iocom is hoping to sell equity in its computer/telephony integration business, which is expected to require further capital investment over the next two years. "Iocom is in discussions that involve a joint venture with parties to provide the capital investment requirements," the spokesman noted.
Iocom is raising $A500,000 through a placement of shares to help "cushion the effects and the costs" of the restructure.