Infinity chief confident losses will turn to profit

By PETER GRIFFIN

Auckland software and IT services company Infinity Group finished nearly $1 million in the red for the half year, but says it has got to grips with restructuring issues that left its sales department in disarray.

Infinity had revenue in the six months to June 30 of $42.6 million, down from $47.8 million in the corresponding period last year.

Despite that, chief executive Stuart Robb expects Infinity to make up ground to become profitable in the fourth quarter and to maintain its revenue target of around $90 million for the full year.

He said 10 sales staff with "higher levels of expertise" had been hired to replace a steady stream of salespeople who had been made redundant or resigned, frustrated at the management put in place when Infinity was formed in 2000 from the merger of IT companies Madison, Trilogy and Comtex.

Former Infinity employees have expressed dissatisfaction with the early leadership of Wellington businessman Murray McCaw, who led Infinity as chief executive from its formation until December when he resigned his position, staying on as a director.

Robb said the New Zealand Rugby Union ructions over the failed bid to co-host the Rugby World Cup with Australia had not affected McCaw's board position despite the high-profile debacle costing him his position as NZRFU chairman.

Robb put Infinity's decreased revenue down to the costs of "building a new selling and marketing capability" and shedding "under-utilised capability".

The transition from having two major customers in ACC and State Insurance to servicing a larger base of smaller customers had been a factor in the result, he said.

Adapting to market conditions, Infinity had turned its attention to small and medium-sized businesses, which competing multinational IT services companies could not service efficiently.

"We've benefited directly with Accenture not being in the market in terms of the central Government opportunities," said Robb. "For that size work, it's difficult for the multinationals to scale down."

Infinity's software businesses - Quanta, Vista, Infinity Law and Infinity Transport - had traded at a small profit for the period and were expected to contribute revenue of around $10 million for the year.

Robb said there were signs that companies were starting to loosen the IT purse strings, but it was too early to get excited about a revival in the market.

The $1 million loss compared to a $5.2 million loss for last year.