Idion Technology Holdings has told its shareholders that the latest offer from Canadian-based DataMirror does not reflect the true value of the company.
This follows auditor Deloitte & Touche`s qualified support of Idion`s profit forecast for the current financial year, in which Idion states it will report positive headline earnings.
Deloitte & Touche approved the accounting practices used by Idion to prepare the forecast, but qualified the nod of approval by adding that the preparation of the profit forecast was based on assumptions concerning future events.
The auditor`s report reads: "...actual results may vary from the forecasts which have been presented and the variation may be material. Accordingly, we express no opinion on whether or not the forecasts will be achieved."
Idion remains adamant that it is in a position to achieve the forecast profit for the year, although it also mentioned some factors that need to remain constant in order for it to reach its goal. These include the seasonality of the group`s revenue - Idion has historically achieved higher revenues in the fourth quarter.
Forecasts also depend on nothing untoward happening in the global market, the exchange rate remaining at an average of R11 to the dollar, income tax rates remaining static in its various trading regions, and the group`s new licence sales returning to the seasonal levels of 2000.
Idion has chosen not to include any revenue from its Orion technology, and no "significant" revenue from its newly released Symbiator 4.0 product.
Based on these assumptions, Idion has once again urged investors not to consider the hostile offer by Canadian rival DataMirror, which now stands at 120c per share.
Commenting on the audited opinion of the forecast, Willem Richard, Idion`s financial director, said in a release to shareholders: "We now have a clear forecast of positive headline earnings for the 2002 financial year. Shareholders have the opinion of our auditors that the assumptions on which we have based these forecasts are reasonable.
"Barring unforeseen circumstances, we expect to deliver on these forecasts. This report reaffirms our inherent value, which is why we have repeated our advice to shareholders to reject the hostile bid. The 120c offer significantly undervalues our company and remains an attempt to buy a valuable asset at a ridiculously low price.
"However, Idion is not in the market. We are not looking for a buyer," reiterated Richard.
Shareholders should know by Wednesday morning whether DataMirror will extend its offer, or back out of the bidding process.
The Idion share price was trading at 150c by 10am this morning.
Share
