Anite narrowly avoids crash landing

IT consultancy and services firm Anite seemed to have managed to pull itself out of its nose-dive on Friday morning, but the future for the company is still far from rosy.

The company’s share price has been in freefall since Tuesday when chief executive John Hawkins issued a profit warning saying that “profits in the first half of 2002/3 could be lower than the corresponding period in 2001/2.”

On Thursday Anite shares fell to 22pence – their lowest level in 10 years. However the share price rallied to 33pence on Friday morning after Anite said it had managed to strike a deal with two of the companies it has acquired – Calculus Solutions and Parsec Systems – to accept shares valued at a higher price than their current level to pay off the outstanding balance.

Anite Travel managing director Simon Tyrrell told TravelMole: “The share price is about sentiment, it’s not about actuality. If you look at what really happened Anite made £28.3 million of real money and travel made £5.1million. We are a real company that is still strong and making profits.”

Critics say the company’s troubles stem from the fact that it has paid too much for acquisitions. In the four years ending April 30 the company made 33 acquisitions at a total cost of £264million.

In the travel arena, ex-Anite marketing director Howard Frost recently told TravelMole that he believed the £10million for FSS in December had been excessive. Anite in contrast argues that the FSS purchase has given it “significant coverage in tour operators and a global reach with offices in US and Australia.”

Anite said that its Travel division had been a “star performer” in the past year, with profits increasing to £5.1million from £3.2million. Mr Hawkins said that he expected that Travel would see a “continued strong growth” in the year ahead. But industry critics say that while the FSS deal gave the company critical mass, there is now nowhere for it to look to except overseas if it wants to win new business.

Anite’s Mr Tyrrell countered: “One of the lovely things about being in our situation is you get people on the sidelines saying this or that about our strategy. The purchase of FSS means we have 150 more clients who we can sell our technology to.”

He added: “We recently appointed a general manager in Australia, there are opportunities in Asia-Pacific and we also have a sales capacity in Boston.”

While Anite said it would be increasing its group research and development expenditure for the Telecoms and Public Sector businesses, it did not mention any R&D investment for Travel. Mr Tyrrell said this was not significant. He told TravelMole: “We have got a large amount of customer funded development that we own the intellectual property rights to. We don’t do a lot of the speculative ‘let’s do it and see how it sells’ kind of research.”

See our previous stories:
01 Jul 2002: The TravelMole Interview: Howard Frost, Travelink
26 Jun 2002: Former Anite marketing director Howard Frost joins Travelink
18 Apr 2002: Viewdata to stay, say industry heavyweights
04 Feb 2002: Anite/FSS merger under scrutiny
04 Dec 2001: Anite buys FSS Group