IWL boosts bottom line but drops ASX deal
Financial planning technology and research groupIWLhas broken off its agreement with theAustralian Stock Exchange(ASX) to jointly develop a straight through processing hub for the managed funds industry.
IWL announced the news in its half yearly report released this morning, which says the two groups could not “conclude a mutually satisfactory commercial agreement, either in relation to software architecture, or connectivity and distribution.”
As a result of this the two groups have resolved to pursue a funds management hub concept independently of each other.
The two groups reached a heads of agreement in May 2002 to bring together IWL’s FundLink and the ASX’s FundConnect projects, but IWL said today the ASX had decided to use systems that were “closely aligned to the database and messaging middleware products already used for ASX’s existing core systems.”
The dissolution of the project is the second such move for IWL, who late last year called off a merger with Iress Market Technology after both parties agreed the moves were no longer in their respective shareholders’ best interest.
IWL says that despite these events the group has posted significant increases in operating revenues, cash flows and underlying profits after tax for the half year ended 31 December 2002.
The reports says operating revenues from continuing businesses was $9 million, up 42 per cent, while operating expenses only climbed by one per cent to $6.58 million. Underlying profits after tax were $0.18 million, up $1.4 million.
The group has also used the report to respond to claims bySanford Securities’ independent directors that a proposed merger between the two groups would not be beneficial.
IWL says the independent directors’ claims are based on a five year profit forecast provided by Sanford, which also stated “there is considerable risk associated with Sanford’s ability to deliver this value to shareholders.”
IWL also points out the independent report say there are uncertainties surrounding Sanford’s future performance and the IWL deal represents a current opportunity for shareholders.
The IWL offer for Sanford closes on March 21.
Sanford, which also released its half yearly results today, suffered a loss of $308,000 for the six months to December 31, 2002.
However this was an improvement on the loss of $559,000 for the previous corresponding period.
The group also generated a steady revenue figure of $10.7 million for the half year.
AUTHOR
Jason Spits
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