Compass pointing in the right direction for market listing

By GEOFF SENESCALL

Compass Communications heralded its move to list on the New Capital Market yesterday with something rarely heard of for a technology company - profits under its belt.

This is something highlighted by its seasoned chairman, John Fernyhough, who has financed the small Auckland telecommunications company since its inception in 1995.

"Many [technology] companies go to the market with a lot of promise about what they are going to do but have no track record. The great strength about this company is that it has one," he said.

In the past two years Compass has turned profits - the latest being $300,000 out of $8.4 million turnover.

Chief executive Karim Hussona said that turnover was expected to come in at between $10 million and $11 million for the current year.

He hoped Compass would turn that into a profit of somewhere around $400,000 to $500,000.

With just under 1 per cent market share, Mr Hussona said there was a lot of room for growth.

Compass will be the eighth company to list on the Stock Exchange's New Capital Market.

Through its organising broker, Forsyth Barr, some 1.2 million 50c shares will be offered to the public to raise $600,000.

This will bring the total number of shares on issue to 2.8 million - of which 1.6 million will be held by Mr Fernyhough, Mr Hussona and the chief financial officer and co-founder, Paul Carter.

The funds will be principally used to buy Compass Communications, which employs more than 50 people throughout the country, around the beginning of next year.

Compass also expects to make further acquisitions, hinting at buying a further internet service provider in the new year.

Among the services Compass offers are national and international toll calls, toll-free services, analogue and digital telephone lines, broadcast fax, data services and internet access services.

It was the first to launch free internet services in New Zealand through Freenet. The company has more than 3500 business customers and more than 55,000 residential customers.

The closing date for the offer is expected to be November 24 or earlier if full subscription is reached.