Brocker insists that bad figures don't tell the whole story

By PETER GRIFFIN

Auckland-based Brocker Technology has reported a $C5.09 million ($7.82 million) loss for its third quarter to December 31, but the IT company claims it is in better shape than the figures indicate.

Brocker was thrown into disarray last month when accounting irregularities were found in its Australian computer distribution division. False invoicing and improper capitalisation of expenditures, plus the cost of winding down the division with the loss of 35 jobs, contributed $C4.26 million to the third-quarter loss, Brocker said.

Revenue for the period was up $C12.7 million to $C37.1 million, mostly from business generated by Brocker's IT subsidiary Datec, acquired last August for $37 million.

Chief executive Richard Justice said the results were disappointing but, apart from the accounting errors, could be attributed to falling margins in the computer distribution business and problems in bringing some software products to market.

"If you discount the Australian situation, the operating loss for the quarter would have been approximately $C830,000 - a figure that is certainly more encouraging."

Overall, for the nine months to December 31, 2000, Brocker generated revenues of $90 million, compared with $109.8 million for the same period in 1999.

The results include Datec's revenues for the first time. Datec contributed $C10.3 million to the group and a $C570,000 tax-paid profit. The rest of Brocker generated $C26.8 million in revenue, an increase of $C2.4 million on the second quarter.

Datec has rapidly become the jewel in Brocker's tarnished crown. It continues to score sizeable contracts, most recently with Queensland-based energy retailer Energex, for which Datec will provide a billing and meter data management product.

Brocker's next hurdle will be securing shareholder support for a one-for-four share consolidation that may be necessary to maintain its Nasdaq listing. A shareholder meeting is planned for April 11.

Brocker shares on the Nasdaq closed on Friday at 37.5USc.