ERP.com sells non-core asset

By Nicola Mawson, Contributing journalist

Johannesburg, 11 Dec 2006

Enterprise solution firm ERP.com will sell its Customised Solutions subsidiary.

In a note on the JSE's news service on Friday, the firm said it had entered into an agreement to dispose of the computer hardware and software retailing division for R1.5 million.

The sale, to John Steyn and Jennifer Steyn, is effective from 1 September 2006 and will be paid for in shares, said the firm. Customised Solutions sells and implements a range of networking hardware and software products including routers, hubs, switches, servers, PCs, thin client terminals and peripherals.

"The disposal is in line with ERP.com's strategy to dispose of those operations that do not support its information risk management (IRM) strategy," it said.

In October, the company reported a 4% decline in its revenue for the year ended July, but said it planned to refocus its energies. Revenue was down from R172 million to R164 million. Its net attributable profit was down 23%, from R26 million to R20 million.

Change in strategy

However, the company informed shareholders it had changed its strategy and would in future focus on the IRM division, as it said "the core strengths of the group lie in the provision of products and services that address IRM".

Its future strategy will be built on two companies, SecureData and Solutions for Business Intelligence, which it says are solid players in the industry. "Both these companies address IRM requirements and it is intended they will form the foundation for the group's future strategy.

"It is anticipated that a more focused strategy, centred on IRM, will enable the remaining operations to achieve organic growth more in line with historic trends and will, additionally, allow the group to be more aggressive in seeking acquisitions that will complement the group's current competence within the strategic focus," it reported in October.

Its disposal of Customised Solutions is predicted to add to its bottom line as it expects, based on illustrative financial effects, earnings per share to move up 5.6% and headline earnings per share to move up 0.8%.

ERP's shares, which closed at R1.35 on Friday, had moved down 5.19% in early morning trade, to R1.28.