Wednesday 29th October 2008
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The company opted to sell Vantex, which distributes point-of-sale, mobile and wireless technology products in the Asia Pacific region, because deteriorating financial markets ruled out selling shares.
Shares of ProvencoCadmus rose 3.7% to 14 cents today, having reached a record low 11 cents yesterday. The company posted a NZ$36.3 million loss last year as trading deteriorated and it took one-time charges for its merger, and a write-down of IP and tax benefits. Provenco and Cadmus would have been worse off without the merger, chairman Rick Christie told shareholders at their annual meeting today.
"Both former Cadmus shareholders and Provenco shareholders will be concerned about the losses of the combined company, as these were not foreseen at the time of the merger," Christie said. "Market conditions deteriorated very sharply during the last quarter of this financial year."
Still, he said the company's stock price "doesn't reflect the market for either company pre-merger."
The company has estimated cost savings from the merger of about NZ$20 million a year. Christie said the company's debt "remains uncomfortably high" though small asset sales are helping reduce the amount and the company also has support of cornerstone shareholders Todd Capital and Peter Maire.
Separately today, ProvencoCadmus said it signed an agreement with SmartPay to distribute its SmartPay IP-POS service. As part of the agreement, ProvencoCadmus has integrated the IP-POS service into its AC8000 EFTPOS terminal.
SmartPay last traded on the NZX on Oct. 15 at 0.8 cents.
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UPDATE: ProvencoCadmus placed in receivership
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