| Mon 30 Jun 2003, 8:46 | | Intervid Limited - Restructuring and cautionary an |
|
Intervid Limited
Share code: ITV
ISIN: ZAE000025615
INTERVID ANNOUNCEMENT
The board of Intervid Ltd today (27 June 2003) announced that it had concluded
its independent review of the business operations and strategy. The review was
actioned following the removal of CEO Rob le Sueur as a director of the company
in April 2003 due to irreconcilable differences of opinion with the board on the
future direction of the group.
Independent consultants Strategy Partners were appointed to assist caretaker CEO
Mark Taylor to evaluate various alternatives for the company going forward.
The findings have highlighted the need to consolidate the business, restructure
the role of the head office and further refine Intervid"s business model.
The role and composition of Intervid"s head office will be reduced and reporting
structures will be simplified. Greater autonomy will be given to regional
management to ensure the businesses have the necessary flexibility to adapt
business offerings to meet the needs of the different markets they operate in.
However, this will be balanced with strict accountability and clear deliverables
to management teams.
To achieve this, the group will be restructured into two separate businesses:
* regional systems integrators, located in major global markets, specialising in
electronic security and business process monitoring such as video surveillance,
access control, monitoring and electronic article surveillance, and
* a technology business that specialises in developing integrated solutions for
electronic security and business process monitoring, as well as distributing its
proprietary hardware and software products.
Both businesses have been tasked to review their strategies and budgets in the
short term. Non-core assets will be either restructured or sold. Remuneration
within the businesses will also be reviewed to ensure appropriate
incentivisation. This process has already commenced and will be largely
completed during July and August.
The board announced that it has, by agreement, terminated the employment of
previous CEO Rob le Sueur, Head of Technology and Product Sales Chris le Sueur,
Head of Corporate Development Keith Pitout and Chief Operating Officer Iain
Foxon.
Arrangements have been made to ensure a smooth transition period and business
continuity. Taylor will continue as caretaker CEO in the coming months and will
be supported by Strategy Partners. Wayne Jaggard has been appointed as Group
CFO, with immediate effect.
Jaggard, a chartered accountant, has 10 years experience in commerce and
industry, which includes 10 months with Intervid in the role of Head: Group
Financial Affairs. His previous positions include Director: Finance and
Administration at Umgeni Water and six years with Robertson"s, then part of the
Remgro Group, where he held a number of senior positions, ending his time there
as Group Financial Manager.
Restructuring and cautionary announcement
The Intervid Board also announced that shareholders should exercise caution in
trading their shares, based on the following:
* Current negotiations between Intervid and its principal loan creditor, RFS
Holdings Ltd (an associate of Intervid shareholder VenFin Limited) regarding the
possible restructure of the terms and conditions of the compulsorily convertible
loan advanced to Intervid International, a wholly-owned subsidiary of Intervid
Limited.
* The review finding that the expected impact of lower sales, outlined in a
trading update of 25 April 2003, will be worse than expected. The business
remains sound and the current restructuring process will ensure the group is
positioned for a controlled and measured growth phase that will focus on cash
flow generation and sustained profitability in the medium to long-term.
The board and major shareholders of Intervid remain firmly committed to the long
term future of the group. The board said the group is positioned in an exciting
growth industry, with established products, a blue-chip client base and strong
operational management and that the restructuring process will refocus the group
to ensure it delivers value to shareholders.
30 June 2003
