Singapore float opens way for Renaissance

By ADAM GIFFORD

Listed company Renaissance is shrugging off its image of being merely an information technology distributor.

It has decided to spin off its Conduit electronic business division, probably through a float on the Singapore Stock Exchange.

"Renaissance isn't viewed as playing in this new economy," said managing director Mal Thompson. "Conduit is a new economy company and has substantial upside.

"To develop the business further will require substantial capital, but the model we have put up is profitable.

"We have enough customers now for Conduit to maintain itself as long as it doesn't outgrow its capacity.

"It has good projections and we believe the exposure of being up in Singapore, going through the listing process, will not only raise capital but will give all our shareholders a much better return, because they have unlocked the value of this new company out of Renaissance."

Renaissance shareholders, who include Singapore-listed company Acma Capital, will get shares in Conduit through the listing process.

Conduit is the result of three years of work and more than $1 million that Renaissance has invested in its website and back-end systems.

Renaissance's e-business division general manager, John Hayson, has been delegated to run the new company, which already has a staff of 30.

Mr Thompson said that more than $1 million a week or 40 per cent by revenue of Renaissance's business now comes off the site.

It is currently putting in Gentran software form Sterling Commerce, which simplifies electronic data interchange traffic and will allow larger customers to come in direct to the back office systems.

That is expected to boost total business done electronically to more than 60 per cent.

"At this stage, Renaissance is Conduit's biggest customer," said Mr Thompson.

Other Conduit customers include Eagle Technology, Fujitsu, Unisys and a raft of smaller companies under the SupplyIT banner.

Mr Thompson said Conduit would be selling a service - hosting a company's website and doing the back-end integration - rather than selling the software to do that.

Its revenue would come from a share of transactions and royalties and from selling development services.

Mr Thompson said issues of business culture and process must be addressed along with the technology.

"Everyone out there I speak to is having a dabble and think they are in e-commerce, but they're not.

"E-commerce is all the background stuff, the returns, the warranties, the service tasks. That's where the real savings are to be made."

He said Renaissance's cost of doing business is dropping as more business is done electronically, and customers use the website to research products and copy invoices and statements.

Mr Thompson said Renaissance believed the big opportunity for Conduit was in Asia.

A trip to Singapore last week by Mr Hayson identified "more business opportunities in four days than we have in this country for the past four months.