Ixchange performs according to expectations

By Iain Scott, ITWeb group consulting editor

Johannesburg, 26 Oct 2001

JSE-listed Ixchange, which is to change its name to FrontRange Solutions in December, says its performance in the first quarter to end-September was largely according to expectations.

The company has also announced that it has separated the positions of chairman and CEO, and has reconstituted its board.

Dana Buys will remain as CEO, but has relinquished his chairmanship. Christo Nel, a partner at accounting firm and Ixchange non-executive director, has been appointed non-executive chairman.

A reshuffle has taken place at board level, with the appointment of Worldwide Solutions executive VP Edwin Gear, FrontRange CFO John Hillyard and Ixchange financial director Julian Pienaar as executive directors.

Dave Carruthers and Derek Kreunen have been appointed non-executive directors. Kreunen, formerly CE, was involved in management buy-outs and no longer works at Ixchange on a full-time basis.

Malcolm Buxton, Johan Buys and Tony Cunnington have left the board with effect from yesterday.

Buys says the group`s revenue performance in the first quarter was creditable across products, service lines and geographies.

Once the group has completed a restructuring process it will be left with one operating entity, US-headquartered FrontRange Solutions, and the group is planning to rename the holding company accordingly.

Buys says FrontRange grew revenue by 3% in US dollar terms and 25% in rand terms in the first quarter, while the four US public companies in related markets saw their revenue fall between 14.5% and 40%.

He says the FrontRange product set is well positioned during the tougher economy. "Our products are priced well, deliver rapid time to value and also help companies reduce expenses in a number of ways.

"In spite of the continuing economic slowdown before the 11 September attacks, the sales performance of FrontRange was strong. While US markets all but shut down for the middle two weeks of September, sales revenue in this month still delivered 40% of the total for the three months, compared to the 45% traditionally experienced in the last month of each quarter," says Buys.

FrontRange has also engaged in a cost-cutting exercise, which has included slashing its overall headcount by 15% and its number of executives by 21% since June.

Buys says he is satisfied with the company`s cash position: "Our improvements in cash flow management and strong control of expenses enabled us to perform ahead of best case scenario cash-management in our budget."

Commenting on the outlook for the financial year to end-June 2002, Buys says the company has budgeted to reduce operating losses in the first half and be profitable on a sustainable basis during the second half.

Investment in product and market development is being maintained at prudent levels that are appropriate to the trading environment, he says.