Praemium restructures to reduce costs
Following a successful $5 million capital raising earlier this month, portfolio administration specialist Praemium has announced an organisational restructure and cost-reduction program to "improve efficiencies and eliminate expenditures".
The restructure followed a review of Praemium's operations which sought to eliminate expenditures that were "not justified by near-term revenue expectations".
The cost-reduction measures will see Praemium incur a one-off cost of $1.5 million in the 2011-12 financial year, and will result in continuing savings of between $2 million and $3 million in ongoing years, according to the company.
The restructure will be funded by a $5 million capital raising that was announced to the ASX on 8 September. The placement was mainly taken up by larger Praemium shareholders, new institutional investors, three of the company's directors and its chief executive, Michael Ohanessian.
Praemium announced on 28 September that Ohanessian and Praemium chairman Bruce Parncutt would both be advancing the company $500,000 on an unsecured basis.
The advanced funds "will ensure the Company's cash balances remain above minimum regulatory, contractual and operating requirements prior to the settlement of the $5 million equity placement", according to a Praemium announcement.
"We remain committed to protecting our core business. For our clients it is business as usual as we continue to deliver our high-quality services. For our investors the priority remains for us to improve bottom-line performance," said Ohanessian.
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