Switchblade proves a turning point for Telesyn

By RICHARD WOOD

The Christchurch arm of multinational networking vendor Allied Telesyn grew almost 40 per cent to report $18.3 million in operating revenue for the year ending December 2002.

The operation designs network switching equipment and has had particular success with a high-speed networking product called Switchblade, sold around the world by its parent firm Allied Telesis KK.

However, annual reports show the subsidiary has not paid tax for the past four years.

Managing director Scott Coles said the firm's accounting methodology was in line with "other players". He said the firm would be paying some tax locally for the coming year.

For 2002 it turned a profit of $195,239, up from a $528,512 loss in 2001 and a loss of $685,232 in 2000.

Coles, who has been in the job five months, said the firm was a research organisation and did not manufacturer locally. The majority of costs were in staffing.

The staff count had jumped to 250 from 175 a year ago and more than 200 of the staff were hardware and software engineers. In February 30 graduates were hired.

Coles ruled out any immediate further expansion of staffing, saying they needed to bed down the existing team. Two years ago the firm bought its own building and had since extended it.

The Switchblade technology is a combination of hardware design and software development and handles corporate network internet, voice and video data switching at "line speed". Design work is done in New Zealand but it is manufactured overseas.

The Switchblade technology is expected to turn over US$20 million in its first year after landing US$3 million in the first two months.

Coles said the future for the product range would be in continuing to develop the software because "anyone can put together hardware".

Allied Telesyn is working with Christchurch manufacturer Enertel to create a specialised power supply for the products that will displace an internationally sourced component.