Renaissance boosts sales amid separation plans

By Phil Boeyen, ShareChat Business News Editor

Wednesday 7th February 2001

E-commerce and tech distribution company Renaissance (NZSE: RNS) has lifted sales to over $155 million in the year to the end of December compared with $122 million last year.

The figure was revealed by the company today when shareholders met to vote on separating the company's e-commerce business - Conduit - from its parent company.

Chairman Richard Ebbett told shareholders that the company has grown impressively over the last two years, in what is a fairly confined market, to a sales level in the financial year just ended of in excess of $155 million.

That makes a December half-year sales figure of around $82 million compared with $73 million in the first half of 2000.

Today's meeting gave Renaissance the green-light for DBS Nominees Private, a subsidiary of the Development Bank of Singapore, to invest S$5million for a 16.67% stake in Conduit, which values the company at S$30 million.

Conduit is the eBusiness division of Renaissance and provides B2B platforms to a number of companies, mostly in the form of individually tailored, fully hosted web sites. It also operates Renaissance's own B2B site, which is one of the largest in the country.

Conduit is in the process of opening an office in Singapore and has established marketing joint ventures with local partners in Malaysia, Thailand and Hong Kong. The first sales have also been made into the Australian market.

Mr Ebbett says a Singapore listing of Conduit as a separate company is the best way to both raise further capital for the continued development of the company and to lift its profile in the high growth Asian countries which are its target markets.

"In Conduit we have a tiger by the tail. While it has been strongly identified with the IT industry, because of its association with Renaissance, Conduit's market is increasingly going to be outside that industry.

"Moreover it is a company with no geographical boundaries, unlike the Renaissance distribution business. It is also in a fast moving industry which will be increasingly driven from commercial powerhouses such as South East Asia."

Shareholders today also approved the issue of 246,662 options to the management of Conduit at an exercise price the same as that paid by DBS nominees.

Renaissance says in a company such as Conduit the intellectual property embodied in its management is a key asset and must be protected, and offering share options is one way to ensure such protection.

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