Jade Software narrows annual loss on $8.5m Empower sale
BUSINESSDESK: Christchurch-based software developer Jade Software Corp narrowed its annual loss after selling trans-Tasman human resource and payroll business Empower HR for $8.5 million.
The company made a net loss of $96,000 in the 12 months ended December 31, down from a loss of $849,000 a year earlier, according to its annual report.
Revenue from continuing operations fell 4% to $33.7m, with earnings before interest, tax, depreciation and amortisation dropping by about a third to $2.4m.
The bottom-line profit was bolstered by a $2.5m gain from its discontinued Empower operation, of which $2m came from the December sale of the unit to software support group Fusion5.
The balance will be payable in the first half of 2012.
“Management committed to a plan to sell the operations in early 2011, following a strategic focus on the group’s growth businesses being JADE, JOOB, Wynyard, Methodware and Master Terminal,” the company said in a note, referring to some of its existing brands.
Chair Ruth Richardson, the former finance minister, said the sale of Empower “captured value for Jade and ensured the handover of an asset acquired some years ago in better shape than we found it”.
The “board is now positioned to make decisions on capital required to accelerate growth in the fast-growing operational risk, intelligence and enforcement markets”, where the company hopes to tap into making securely accessible mobile phone applications through its JOOB brand and its security solutions brand, Wynyard Group, she said.
As at December 31, Jade Software had $5.4m in cash and equivalents.
Managing director Craig Richardson said Jade Software is in its final year of its transformation programme.
“While it remains difficult to forecast during these challenging economic times, we have done the right things to ensure we have every opportunity to succeed in the year ahead.”
Jade Software recognised $1.2m in government grants in the year, and was awarded $3.2m over three years from the government’s Technology Development Grant Programme in 2010.
The company spent $10.5m on research and development in the year, though that fell to $4.4m after it capitalised those costs.
The company is controlled by British financial services firm Skipton Building Society, with a 57% stake, and investment syndicate USA Health Investors, with 26%.
New Zealand investors, including founder Gilbert Simpson’s 1.7% stake, own about 14%.