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| Sunday, May 17, 09:35:17pm | [ Login ] [ Contact Forum Admin ] [ Main index ] [ Post a new message ] [ Search | Check update time | Archives: 1, 2, [3], 4, 5, 6, 7, 8, 9, 10 ] |
| Subject: Re: Noteholders have tickets to ride | |
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Author: Cards not so smart for ERG: new boss |
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Date Posted: Tuesday, March 09, 07:39:47am In reply to: Newspapers reporting result--March 7 2003 SMH 's message, "Noteholders have tickets to ride" on Thursday, March 06, 08:38:56am Cards not so smart for ERG: new boss By Neale Prior THE new chief executive of struggling technology group ERG yesterday officially ended the company's costly push to be a world leader in smart cards and promised to focus on its core public transport ticketing business. Allan Sullivan, who replaced long-standing ERG chief executive Peter Fogarty in December, conceded the company's performance in delivering on contracts was poor and it needed to improve to reverse its perennial negative operational cash flows. He made the comments after releasing the group's half yearly financial statements that showed another $43 million in losses and a $25 million loan from an entity linked to director Duncan Saville, who was instrumental in last year's $250 million debt-for-equity restructure. The financial statements also reveal the group has continued to breach a number of banking covenants because of its financial performance, but has again received waivers. The December half loss included $36.2 million of provisions and write-downs, including a $5 million provision for further restructuring and cost-cutting planned by Dr Sullivan for this year. Yesterday's figures were an improvement on its $125 million loss in the December 2003 half, which was the penultimate result in a two-year horror period in which more than $400 million was lost by the former darling technology play. The company went near to collapse and its share price was decimated from 2001 to early 2003 as it was hit by delays in the awarding and installation of major transit ticketing contracts. ERG and Mr Fogarty had previously gained market and investor support for a corporate vision that had smart card-based transit ticketing systems delivering valuable opportunities in other smart card-related areas, such as security, banking and electronic purse. Dr Sullivan, who was recruited by the new ERG board from a division of global giant Siemens, said the company had to concentrate on winning and delivering transit contracts. "With a company this size, you have to be focused," he said. "Let's not try to be everything to everyone, let's be the best at what we do." He said when the company got its core contract delivery right, it might receive other opportunities. It would try to win big project work, on-going operating and maintenance deals as well as small project business. The diversity of contracts would provide buffers against the lumpy big jobs. The December half accounts show the company suffered negative operating cash flow of $15.5 million, compared with negative operating cash flow in the December 2002 half of $10 million. But the company's coffers were boosted by $28 million in cash inflows from sales of property, plant and equipment and total investment-related inflows of $29.4 million, giving it cash at December 31 of $12.6 million. Dr Sullivan said improving efficiency in contract delivery and reducing the operating cost base would help deliver earnings and positive cashflow. The group would have to make cuts around the world. [ Next Thread | Previous Thread | Next Message | Previous Message ] |
| Subject | Author | Date |
| $25m loan bails out ERG===February 28, 2004 | February 28, 2004 | Tuesday, March 09, 07:42:12am |