JSE-listed ITI Technology Holdings CEO Gerrie Coetzee has resigned amid a major restructuring of the group.
The market reacted negatively to the news, with the ITI share price slipping 22% or 13c by late morning to trade at 45c after 569 645 shares changed hands in 68 deals.
Coetzee has been replaced by Frank Arico, founder and former MD of ITI subsidiary CRS.
Services division MD Steve Buck has also been appointed to the board in line with the restructured company`s policy of having operational directors at board level, Arico announced at the presentation of the group`s results for the six months to end-March.
Financial director Francois le Roux says Coetzee told the board "some time ago that he was considering stepping down from an executive role".
He says Coetzee worked hard to bring the group to where it is and wanted to be relieved of the heavy responsibility. As the restructuring process drew to a close, he expressed his wish again.
"Frank emerged as the natural successor because of his background in software and services, so we considered the matter carefully and decided we could take the group forward," adds Le Roux.
ITI has restructured into two divisions - software business solutions, comprising SCManager, Emerging Technology Solutions and CRS; and services solutions, comprising Edgetec.
Le Roux says ITI was "trying to be all things to all people", but as that could not work it adopted the new structure, "which is simplistic and shows a single focus".
The group has closed down or disposed of several businesses, and some are in the process of being sold.
A formal announcement is expected within a week with regard to the sale of the Centrocen business. A deal has been concluded and the business will be sold for up to R88 million.
The group has also decided to sell the Mining Management business as it does not fit in with ITI`s strategic direction.
During the six months to 31 March 2000, ITI lifted revenue to R133.9 million, compared with R104.5 million at the interim stage last year. Continuing operations` revenue rose to R76.1 million from R33.7 million previously.
Operating profit was R4.5 million (1999: R10.7 million), while for continuing operations the figure was R18.2 million (1999: R7.7 million).
Pre-tax profit rose to R16.9 million (R11.7 million), with headline earnings per share rising almost 14% to 10.43c (9.15c).
A sundry debtor figure of R47.3 million includes R42 million relating to cash proceeds of the disposals.
Le Roux says the 24% operating margin from continuing operations is sustainable, adding that 68% of the operating profit was derived offshore.
He notes that 50.26% of turnover was earned locally, while the US accounted for 28.01% and the UK 21.73%.
The total cost of the restructuring process was R13.3 million, but Le Roux says that "we believe the benefit of restructuring will be far better than the cost of restructuring".
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