Chanui tea guy, attempting to turnaround $29m tech basket case, updates on sales and seeks $3m
When we last checked in with Doug Hastie - aka the Chanui tea guy - he had parachuted in to try and turnaround Syft, an NZ technology company that had garnered glowing press but also chewed through $29 million in shareholder funds without turning a profit.
At that point, Syft had sold five of its electronic sniffer systems, which typically sell for north of $300,000 and test air quality.
So how have things gone since May 5?, NBR ONLINE asked Mr Hastie last night.
"We've sold four more machines since we last spoke, making nine confirmed orders for the year," Mr Hastie said.
"Three of them are for container testing and one for air quality.
"The air quality one is really exciting as its to University of California Riverside, a leader in air quality testing. They originally had an instrument from a competitor but after it received water damage they chose to buy a Syft with the insurance money."
Mr Hastie said the company is now making two machines per month rather than last years one-every-two-months rate.
That put the company on track to breakeven for the year and made it "very profitable" on a monthly basis.
Speaking of money, Syft is planning a $3 million rights issue this month.
Why is it selling new shares? (Syft is privately-held, with its private equity share transactions handled by Unlisted.)
"The increased order flow requires more working capital, and we want to invest more in sales," Mr Hastie said.
UPDATE May 5: Most people know Doug Hastie, if not by name, then as the guy who fronts the Chanui tea ads.
Mr Hastie, a one-time equities trader at Goldman Sachs in New York, owns Chanui.
Now he's taken the reins at struggling high-tech Christchurch high-tech company Syft – maker of instruments for detecting volatile compounds in air; electronic sniffers that can, for example to analyse air pollution, assist customs officers nab nefarious substances, or spot when goods in a container have spoiled.
He’s also become the company’s CEO (with shares as part of his incentive package).
Syft has burned through $29 million in investor funds over the past nine years, but is not making a profit.
Staff numbers have fallen from 43 to 26.
The company hasn’t had a permanent CEO for two years.
“On the surface it looks like a financial basket case,” Mr Hastie told NBR ONLINE.
That’s the bad news.
The good news is that Mr Hastie reckons Syft will break-even within a month, and certainly before the end of this year.
Syft has so far sold five systems this year. (The cost varies depending on setup, but NBR understands it typically costs north of $300,000 per installation.)
Last year it sold six. Mr Hastie expects to confirm 2012’s sixth sale by the end of the month, with 11 or 12 by year’s end.
Next year, he expects sales to double.
He also wants to tighten up the way the “sometime aimless” way the company has been run. “It drifted for a while. We need more focus.”
What went wrong?
Syft developed great products, Mr Hastie said.
But now it needed to focus more on finding practical applications for its technology.
It also needed to do a better job of selling (read: New Zealanders treat salespeople like dogs - Chanui tea guy Doug Hastie).