Software a punt for investors

By PAUL PANCKHURST

The sizzle in the latest sharemarket float is Dejar, a software product already sold to one bank in New Zealand and another in the Czech Republic.

But the prospectus for the tiny - $2.3 million - share offer by Auckland company Solution Dynamics says international glory for the bill archiving system is far from certain.

Either "sales could boom - or someone else's technology could supersede this software".

The organiser of the second float on to the sharemarket's fledgling AX board is sharebroker Colin Giffney, of Giffney & Jones.

Giffney also organised the initial public offering of Just Water International.

He said the AX was designed for companies like Dynamic Solutions.

"It is a smaller company with a core cash-flow business but an opportunity to grow very strongly off the back of technology.

"It therefore carries a higher risk-reward profile."

Founded in 1996 by Dave Thornber and Craig Pellett, the Albany business has 70 staff and four units: Comit Group, Complete Print Solutions, Complete Data Services and Dejar International.

In the industry jargon, it handles "outsourced customer communications" across data entry, data management, laser printing, and document distribution and archiving.

Solution Dynamics' chairman Mike Smith - better known to the sharemarket as head of Computershare - said the traditional businesses of mail house and "transactional processing" gave the company a solid cash flow.

Chief executive Rob Ford said the money from the float would be used for working capital and to cut debt.

Solution Dynamics is projecting earnings of nearly $2 million on revenue of $12.9 million.

On that basis, the float values the company at four times earnings. The projected dividend yield is 7.5 per cent.

The offer closes on July 16.