Diligent soars on back of iPad

Shares in Diligent Board Member Services hit their highest point yesterday after another strong sales report for the software developer, which has almost tripled in price since last September.

The company, whose early days were clouded by controversy, listed at $1 in 2007, only to sink to 7c a share two years later. It closed yesterday up 9.6 per cent at $1.37, having hit a record $1.44 earlier in the day.

Diligent provides an internet-based product that allows directors to manage, look at, annotate and review their materials. Its success has been helped by the acceptance of the Apple iPad tablet computer as an executive tool.

Chairman David Liptac bought a 23 per cent stake in Diligent at 14c a share in 2009 through his New York-based investment firm Spring Street Partners, which specialises in buying stakes in small companies.

At yesterday's closing price, he is looking at an 878.5 per cent gain on his investment. "We've had some successes but we've had some failures, too," Liptac said from New York.

It has not all been plain sailing for Diligent. The company's listing was marred when Diligent founder Brian Henry admitted his failure to be open about his past and that of his convicted fraudster brother, Gerald.

Gerald Henry floated Energycorp in the 1980s and after it crashed was bankrupted in 1989, owing $55 million. He fled to the United States where he was jailed for four years in 1996 after he was found guilty of fraud charges.

Brian Henry was also a director of EnergyCorp, which was notorious for its expensive cars for executives, a corporate jet and subsidiary companies that failed to deliver.

In early 2009, Brian Henry resigned as chief executive after he admitted he should have disclosed his relationship with Energycorp. At the time he had 20 per cent of Diligent but it is understood he has been steadily selling down the stake.

"We are a much better company now than we were three or four years ago," Liptac said. "There were some issues that were obviously fairly public in New Zealand and there were a lot of negatives surrounding those problems, but they had a fantastic product and some success, particularly at the point where I got involved," he said.

The company said yesterday its net annualised licence fees increased to US$2.9 million in the second quarter, up 326 per cent over the same quarter last year. New sales for the quarter surpassed the previous quarterly record by over US$1 million and marked the fourth quarter in a row of record-breaking results.

Diligent now services 104 Fortune 1000 companies. "The increasing acceptance of the Apple iPad in executive suites around the world has continued to be a key driver of the company's sales growth," the firm said.