Shareholder Update
Idion Technology Holdings Limited
Withdrawal of Cautionary Announcement
Further to the cautionary announcements published on 18 December 2000, 2
February 2001 and 18 April 2001, shareholders are advised that negotiations
with an internationally-based software company have been suspended.
Discussions are expected to resume when international stock markets
stabilise.
Shareholders are therefore advised that they no longer need to exercise
caution when dealing in IDION shares on the JSE Securities Exchange South
Africa.
Shareholder Update
In view of ongoing uncertainty in international markets, IDION's board of
directors would like to update shareholders and the investment community on
current trading conditions and the outlook for the financial year.
1. Seasonality of Vision Solutions
- In order to appreciate the continued seasonality of Vision Solutions'
business, shareholders should note that over the past five years only 30% -
35% of Vision Solutions' annual revenue is generated during the first six
months of the financial year. Revenue to date is in line with this trend.
- Due to this seasonality of revenues, Vision Solutions has historically not
been profitable until the second half of its financial year. The interim
results announced for the four months ended 30 June 2000, did not reflect
Vision Solutions' traditionally weaker first quarter, as a result of the 28
March 2000 closure date of the Vision Solutions' acquisition.
2. Trading Update
2.1 Vision Solutions
- Vision Solutions' revenue expectations for the current financial year were
initially indicated to be in the region of US$35m-US$38m. However, at the
time of the 31 December 2000 results, the Board of directors and management
warned of a potential slow down in the North American markets.
- This slowdown has materialized and if the current North American market
conditions persist revenues are expected to be in the region of US$33m -
US$35m (pro forma 12 months to 31 December 2000: US$26,3m.)
- Some sales transactions in North America have been delayed by customers.
However, Vision Solution's new business pipeline remains strong, which
should result in an improvement in revenues in the second half of the year.
- Operations in EMEA ("Europe, Middle East and Africa") and in Asia Pacific
are trading in line with expectations.
- The business is expected to be cash flow positive and cash positive at the
interim stage.
- For the full year 2001, Vision Solutions is still expected, year on year,
to show bottom line growth.
2.2 IDION.BSG
- Ken Jarvis has been appointed as CEO of IDION's South African operations
(IDION.BSG and IDION Software/Vision SA).
- Initiatives have been implemented in IDION.BSG Gauteng to improve the
division's performance, including the further strengthening of the
management team and the finalisation of historical project management
difficulties. These initiatives should enable IDION.BSG Gauteng to take
advantage of exciting opportunities.
- IDION.BSG Cape Town is currently trading well with significant
opportunities for the immediate and long-term.
- IDION.BSG is expected to return a profit by year-end. The outlook for the
remainder of the year is positive.
2.3 Conclusion
The directors are therefore satisfied that the fundamentals of the business
are sound and that the outlook for the full year remains positive.
Appointments
- IDION has appointed PricewaterhouseCoopers Corporate Finance to be IDION's
sponsor on the JSE Securities Exchange.
- Deloitte and Touche, the current auditors of Vision Solutions, have been
appointed as the Group's global auditors.
Johannesburg, 5 June 2001
Sponsor
PricewaterhouseCoopers Corporate Finance (Pty) Ltd
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