Tough times at the $100 million technology and education company Renaissance have seen managing director Paul Johnston - one of the best-known characters on the New Zealand IT scene - exit stage left.

On Wednesday, Renaissance revised its full-year profit guidance down from $1.7 million - $2 million to $700,000.

Saying, “it was the right thing to do” after recent results “that have not met expectations”, Mr Johnston (pictured) tendered his resignation. CFO Chris Lewis also offered to walk.

Renaissance’s board, which includes TVNZ chief executive Rick Ellis, accepted both men’s resignations, it was announced today. Long-time director Mr Ellis rejoined Rennaissance in 2006, after an absence of four years during which he headed EDS' New Zealand operation.

Mr Johnston leaves behind a salary recorded in the company's 2008 annual report as $373,108. The MD was also granted a $355,000 interest-free loan for the purchase of share options.

Sudden reversal
As recently as August 5, Renaissance had told the NZX it expected a lift in second-half profit. For the first half, Renaissance squeaked into the black, making $280,000 on revenue that was flat at $94.6 million. For the first half of its 2008 financial year, the company made a $2.1 million profit. Debt was reduced from $4.74 million at December 2008 to $2.84 million as of June this year.

The Apple squeeze
After losing its exclusive agency to distribute Apple in New Zealand in 2006, Renaissance embarked on a aggressive diversification drive. The company bought private tertiary education provider Natcoll - with 118 staff and 5000 students across campuses in Auckland, Wellington and Christchurch - for $6 million in 2007.

The same year, Renaissance bought Apple retail chain Magnum Mac for $3.5 million. At the time, Magnum had an annual turnover of $28 million and profit of $1 million.

Renaissance also began to distribute more brands outside of its core Apple business; most notably Taiwanese PC maker Asus - the pioneer in netbooks.

In November last year, Renaissance opened a Magnum Mac superstore in Auckland’s Newmarket, looking to mimic the success of Apple’s own retail brand, Apple Store.

However, the stars did not align for Mr Johnston, with the company’s diversification effort ran head-long into the recession. During the first half, Magnum lost $580,000 - blamed on the cost of store make-overs.

Mr Johnston said tighter than expected margins in Renaissance’s Apple division did not help, either.

Although Apple never appointed a second New Zealand agent, it did begin to sell product direct through its Apple NZ website.

Another issue: the high dollar hindered Natcoll's ability to recruit foreign students.

News of the resignations came after the market close. Renaissance’s shares, (NZX: RNS) traded flat today.