Listed holding company Bidvest is taking a firm approach to move subsidiary I-Fusion away from chasing turnover to reporting profit, and part of the process has seen I-Fusion retrench between 30 to 40 staff.
Len Chimes, chairman of the Bidoffice division, says a hard line has been taken to downsize I-Fusion in an effort to bring it in line with the group`s strategy of focusing on profit rather than growing turnover.
"The IT industry is burning and strong measures have to be implemented to bring technology companies back to profitability. This requires a businesslike look at operations and making the necessary decisions."
Chimes confirmed that between 30 and 40 I-Fusion staff have been retrenched, adding that about 220 staff members remain. The latest batch of lay-offs comes after a previous retrenchment exercise late last year.
"Profit is all to shareholders and I-Fusion is no different to any of the other companies within the group. Proper asset management is vital in this industry and this [the retrenchment exercise] is merely part of that management," says Chimes.
Bidvest announced on SENS today that it has upped its holding in I-Fusion from 78.13% to 78.16% after buying additional shares on the market.
Chimes says the timing of Bidvest acquiring the entire issued share capital of I-Fusion depends on the market and what shares become available.
"This, like the turnaround of the company, can not be achieved in five minutes, but we expect the issue to be settled in time."
I-Fusion reported an attributable loss of R8.43 million for the year to June 2001, despite what CEO Ron Sackstein described as an annualised increase in turnover of 15%.
Bidvest chairman Brain Joffe said at the time of the company`s year-end results that I-Fusion negatively affected Bidvest`s earnings per share by 2.8c for the year.
Trading steadily at 45c, I-Fusion currently has a price per earnings ratio of -16.67.
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