Software company Ixchange Technology Holdings has established a third division aimed at transferring existing leadership and management expertise to new software products.
The "Ixchange Incubator" division will house four software development initiatives, CEO Derek Kreunen said at the release of the group`s interim results for the six months to 31 December 1999.
The initiatives are Web-based employee self-service systems, Web-based customer interaction, employee benefits systems and customer loyalty systems, all of which will be nurtured to full product status.
Ixchange has reported operating income of R39.4 million for the period, a 105.2% increase from the R19.2 million in the half year to December 1998. Revenue increased 109.4% to R253.4 million (1998: R121.0 million).
Financial director Kerstin Speer says 68% of revenue was generated in the US, with Southern Africa contributing 15%, Europe 14% and Asia Pacific 3%. About 85% of revenue is derived from sales of the group`s GoldMine software.
Chairman Dana Buys says the 109% revenue growth was attained on the basis of consolidating the group`s owned legal entities for the two comparable periods to December.
Commenting on the operating margin improvement from 12.4% to 15.5%, Buys says: "The period to September 1999 was marked by management ending the practice previously followed by the Los Angeles operation of recognising revenue when sold to channel partners."
The new revenue recognition policy requires channel partners to present end customer purchase orders together with own orders for the GoldMine product, he says.
Of the exceptional items of R362.1 million on the income statement, R366.8 million relates to a capital gain on the sale of 10% of GoldMine Software to Peregrine, while R4.7 million deals with a trading loss.
Attributable earnings increased to R387.1 million from a previous R14.99 million.
Headline earnings rose to R22.4 million (R14.99 million), while headline earnings per share increased 16.0% to 15.19c (13.09c). Buys says the company will continue its policy, stated in December, of concentrating on growing market share rather than earnings.
Buys announced at the results presentation that GoldMine has selected Microsoft`s SQL Server 7.0 as its database of choice for FrontOffice 2000.
In January the group acquired Salesware, a sales process management software technology company, as well as London-based AVG, the sole distributor and accredited channel partner trainer for the GoldMine product to drive the expansion into the UK and Europe.
Looking ahead, he says the GoldMine division will experience the effect of the FrontOffice and GoldMine 5.0 product launches in the second half of the financial year. The Peregrine deal created net after-tax proceeds of $85.5 million, which will be used to expand the operations.
Buys says telecommunications regulation is one of the greatest obstacles for SA in the information age. He compares bandwidth constraints in SA to living 50km from work while owning a car which travels at 5km/h.
The countries which regulated development during the Industrial Revolution later became the communist countries, he warns.
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