Infinity continues down losing track

By PETER GRIFFIN

Infinity Group's aim of becoming profitable by the end of the year looks shaky, with insiders saying the company has already lost $900,000 since the end of June.

Speculation is also mounting that the IT services and hardware vendor is being eyed as an acquisition target by rivals - systems integrator Gen-i, in particular.

Infinity, whose shares trade in the unlisted market, reported a loss of nearly $1 million in the half-year to June 30 on revenue of $42.6 million.

Since it was formed in 2000, the company has lost more than $27 million, a figure including a number of goodwill writedowns.

Sources close to Infinity say Gen-i is interested in Infinity's substantial contract with EDS for desktop support and its strong relationship with IBM in the server area.

"They don't want the company. They want the customer base and maybe the top 50 staff," said one source.

Infinity chief executive Stuart Robb dismissed talk of a $900,000 loss in three months, but did not offer a more accurate figure.

"We've still got exactly the same position on the trading of the business - we still expect to be profitable in the last quarter of this year."

Robb said that result wouldbe achieved through "firmingup our revenue pipeline and astrong focus on costs".

Suggestions that Infinity was being eyed by Gen-i were "off the radar screen", said Robb. Infinity and Gen-i collaborated when it suited both parties but there had been no approaches to buy.

However, sources say Gen-i had considered using Infinity for some software development work, but decided against doing so because the move would add value to Infinity, making it a less desirable acquisition target further down the track.

Gen-i chief executive Garth Biggs said that while the executive team had authority to seek acquisition targets, it was not doing due diligence on Infinity.

"From time to time we cast our mind over who else is in the market. Sometimes it leads to a cup of tea or lunch, sometimes it goes beyond that," he said.

"We have been looking at the marketplace, but I haven't received a single number from Infinity."

Robb also scuttled rumours that Infinity board director Patsy Reddy had indicated she was resigning. Reddy, with fellow former Brierley executives Bruce Hancox and Paul Collins, controls 44 per cent of Infinity through Active Equities.

Reddy, who also sits on the board of Telecom and Sky City Entertainment, said she would remain a director and investor.