Intervid to exit North America

By Iain Scott, ITWeb group consulting editor

Johannesburg, 10 May 2004

JSE-listed Intervid is planning to sell its North American business to the region`s management.

The sale, for which heads of agreement have been signed, forms part of the group`s "back to basics" strategy aimed at turning it around.

Intervid North America has been burning cash and the group says the sale will result in the exposure to losses being removed. Intervid will retain an option to acquire a shareholding in the business at a later stage.

Intervid incurred a net loss of R19.76 million for the six months to December last year, a period in which major shareholders, the Howard family, staged a boardroom coup which was later reversed.

The drama climaxed with the sale of the Howard family stake in the business to existing shareholder VenFin.

Intervid has told shareholders that it has decided to focus on Africa and the UK, its two key geographic markets for systems integration.

"Intervid Australia and Intervid Middle East are expected to continue to grow their relatively small businesses and are on track to become profitable," it says in a shareholder update. "These areas present attractive future growth opportunities."

The group also says it has entered into preliminary talks to explore potential business opportunities with Sensormatic SA.

Sensormatic SA was recently awarded an original equipment manufacturer contract by Swiss group FAST Video Security. The contract was previously held by Intervid until the relationship between Intervid and FAST soured.