ASX-listed Inventis restructures ailing NZ unit after management buyout falls over
Inventis, the ASX-listed furniture and technology company, has restructured its unprofitable New Zealand unit, after talks to sell the business to the local management and another external buyer fell through.
Philip Downie will be acting chief executive for the Auckland-based Damba and Gregory Commercial Furniture NZ business, replacing managing director Bruce Roberts who resigned effective Friday, the Sydney-based company said in an announcement to the ASX. Roberts joined Inventis's local unit in October last year, with the goal "to rejuvenate the Damba brand and to develop this within the New Zealand marketplace," according to his LinkedIn profile.
Inventis reported a loss of A$1.82 million in the year ended June 30, from a profit of A$2.95 million a year earlier, its annual report shows. Sales fell 18 percent to A$16.8 million while its furniture division, which includes the kiwi operations, reported an earnings before interest, tax, depreciation and amortisation loss of A$1.2 million, widening from an Ebitda-loss of A$600,000 a year earlier.
Sales in New Zealand, which make up 16 percent of all total revenue, fell 3.3 percent to A$2.84 million, while Australian sales fell 21 percent to A$14 million in the year.
The company attributed its annual loss, excluding one off restructuring costs in Australia, "entirely to the poor performance of our New Zealand subsidiary". It has since restructured the business after failing to flog it off in to an undisclosed potential buyer, and then to Roberts in a management buyout.
"To ensure sustainable profitable results, the board re-analysed the New Zealand operations and has been working diligently to, align expenditure with income; ensure on time delivery of goods and services to our clients; protect its supply chain by working more closely with its suppliers and other stakeholders to increase gross profit margin," Investis executive chairman Tony Noun said in a statement.
The company has also reduced staff and moved its operations to reduce occupancy costs. It expects changes to halve its break-even point as at June 30 this year, and lead to profit growth.
Shares of Inventis were unchanged at seven-tenths of an Australian cent on the ASX, valuing it at A$4.2 million.