Menu
Tomizone flags $2.5M loss as it eyes up fresh Kiwi acquisition

Tomizone flags $2.5M loss as it eyes up fresh Kiwi acquisition

Comes as the company eyes up its third acquisition in New Zealand

Tomizone (ASX:TOM) finished the six months ending December 2017 with a $2.48 million net after-tax loss (NPAT) amid its ongoing transformation into a full-blown managed service provider.

The publicly-listed company reported a revenue surge of over $500,000, to $1.68 million, during the first half of the 2018 financial year, no doubt helped by its acquisitions of Bluesky and Ironman Group in October 2017.

However, the company’s costs and expenses ballooned during the period, contributing to the deepening losses for the half-year – its loss for the same period the year prior stood at $1.4 million.

The company told shareholders that, for the first half of the reporting period, the Tomizone business was limited to its existing legacy Wi-Fi business.

“As a standalone this business did not have sufficient scale to be sustainable and the company implemented a strategy to rebuild the company,” the company said.

The company also pointed out that the acquisitions of Bluesky and Ironman Group in New Zealand late last year, and the full impact of the acquisitions, was only occurring towards the end of the period.

Tomizone implemented a new board and management team in August 2017 and, following a review of the group, more than $2 million of costs were removed from the business. A further $500,000 has been identified to be removed in coming months.

“The majority of these cost reductions were actioned in the later part of the period and hence had minimal impact on the result for this period,” the company said.

Tomizone said it has also chosen to impair the carrying value of several older platforms that are no longer used but were carried on the balance sheet.

However, the company’s cost cutting efforts did not prevent it from coming under scrutiny by the Australian Securities Exchange (ASX), where it is listed.

In February, Tomizone defended its ability to continue operating after the ASX questioned its ability to keep trading following at least two quarters of losses.

“Tomizone has taken the steps necessary during the period to position it for a successful transition to scale and profitability,” the company told shareholders on 28 February. The restructure and integration of acquisitions is an endorsement of the company’s strategy.

“The benefits from actions taken by the company over the last six months will be accounted for in the current half. Your board and management continues to work tirelessly to build shareholder value and we thank all shareholders for their ongoing support,” it said.

Despite capping off the first half of FY18 with a multimillion-dollar loss, the company is currently in the process of mounting its third acquisition in the New Zealand market.

The company said in late February it expected to garner an additional A$1 million in annual revenue after inking a deal to acquire a New Zealand-based managed services provider (MSP).

While the company is yet to reveal the identity of the acquisition target, sources indicate that a likely candidate for the deal is Sweep Internet, a New Zealand hosting and business communications specialist. However, this has not been confirmed by either company.


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags AustraliaNew ZealandtomizoneIronmanBluesky OnlineSweep Internet

Brand Post

What to expect from your IT Distributor

Whether you’re just starting out or you’ve been around since before the dot com rollercoaster, choosing the right distribution partner can be a pivotal factor in your success. This definitive guide outlines the traits that every IT partner needs to look for in their IT Distributor.

Featured

Slideshows

Meet the Reseller News 30 Under 30 Tech Awards 2020 winners

Meet the Reseller News 30 Under 30 Tech Awards 2020 winners

This year’s Reseller News 30 Under 30 Tech Awards were held as an integral part of the first entirely virtual Emerging Leaders​ forum, an annual event dedicated to identifying, educating and showcasing the New Zealand technology market’s rising stars. The 30 Under 30 Tech Awards 2020 recognised the outstanding achievements and business excellence of 30 talented individuals​, across both young leaders and those just starting out. In this slideshow, Reseller News honours this year's winners and captures their thoughts about how their ideas of leadership have changed over time.​

Meet the Reseller News 30 Under 30 Tech Awards 2020 winners
Reseller News Exchange Auckland: Beyond the myths — how partners can master cloud security

Reseller News Exchange Auckland: Beyond the myths — how partners can master cloud security

This exclusive Reseller News Exchange event in Auckland explored the challenges facing the partner community on the cloud security frontier, as well as market trends, customer priorities and how the channel can capitalise on the opportunities available. In association with Arrow, Bitdefender, Exclusive Networks, Fortinet and Palo Alto Networks. Photos by Gino Demeer.

Reseller News Exchange Auckland: Beyond the myths — how partners can master cloud security
Reseller News welcomes industry figures at 2020 Hall of Fame lunch

Reseller News welcomes industry figures at 2020 Hall of Fame lunch

Reseller News welcomed 2019 inductees - Leanne Buer, Ross Jenkins and Terry Dunn - to the fourth running of the Reseller News Hall of Fame lunch, held at the French Cafe in Auckland. The inductees discussed the changing face of the IT channel ecosystem in New Zealand and what it means to be a Reseller News Hall of Fame inductee. Photos by Gino Demeer.

Reseller News welcomes industry figures at 2020 Hall of Fame lunch
Show Comments