Continuing losses at Iona Technologies have added to speculation that the troubled Irish technology leader may be a prime acquisition target. Revenues for the second quarter of 2003 were down by almost half of the revenues at the same time last year, although net losses were down by more than a third of last year’s losses.
In results posted this afternoon, Iona reported revenues of US$16.4m compared with revenues of $33.4m the same time last year. Net losses were down to US$25.4m compared with losses of $37.3m a year ago.
The company in recent months instigated a management reshuffle that saw the departure of Barry Morris from the company and the return of Chris Horn to the role of CEO, while multi-millionaire Kevin Melia became chairman of the company.
Yesterday however, NCB Stockbrokers recommended that Iona should put itself up for sale in light of hostile market conditions. The leading broker issued a report stating that Iona’s standalone strategy is no longer viable and the company should sell while it still has money in the bank and more than 4,500 clients.
As part of its results, Iona also reported a one-time restructuring charge of US$14.8m in the second quarter for consolidating excess facilities and reducing the workforce. Additionally, the restructuring also saw assets worth US$2.3m written off.
Two months ago CEO Chris Horn announced plans to reduce headcount at the company by almost 200 people, resulting in a streamlined Iona employing 400 staff, of which 170 will be at the company’s Dublin offices.
Despite tough operating conditions, the company said that its cash and marketable securities balance at the end of the quarter stood at US$59.3m.
Iona founder and CEO Chris Horn commented: “We took necessary actions in the second quarter to bring the organisation in line with the challenges and opportunities in today’s marketplace. I feel we have the organisation we need to help our customers address the high performance integration problems that surround their mission-critical systems.”
In a forward-looking statement, the company said it expected revenues in the third quarter to be more or less flat, to within 10pc of today’s revenue figures.
By John Kennedy