NetComm's great leap forward - into services

Stuart Corner
Friday, 23 November 2007 08:39

IT Industry - Deals

Stewart said: "Traditionally, NetComm has distributed its products via ISPs, distributors and resellers. Part of our transformation to a systems and services company will involve developing deeper relationships with our channel partners as we begin to provide them with recurring revenue opportunities. In turn, we expect that they will seek to bind closer to NetComm."

He concluded by saying: "in summary NetComm's business transformation project will: leverage [our] technical design and product development skills; deliver new products and services into existing channels; get access to new market channels; and build services that generate multi-year annuity revenue streams. Our key strategic objectives will be: build management team depth in line with growth; drive recurring revenue and earnings; and build strong, sustainable shareholder value over time."

NetComm's move into services marks the latest phase in a long-running plan to move away from commodity hardware products predominantly aimed at home users. The initial phase has not been without its hiccups but Winters said that it now been completed satisfactorily, and Stewart added: "I want to stress that whilst we have successfully completed the first steps in implementing that transformation strategy, we are working to a two to three year plan."

For the half year to 31 December 2006, NetComm reported a net loss of almost $400,000 on revenues of $10.3 million and said it was  striving "to build a viable presence in the SME market" by "increasing the tempo and sophistication of product development; establishing strategic partnerships that will leverage market-leading technologies to fast-track NetComm products to market; identifying and implementing mergers and acquisitions that will increase geographic coverage and tap new streams of revenue."

For the full year to 30 June 2006, NetComm posted a net loss after tax of $1.2 million compared to a profit of $0.97 million in the previous year. This was attributed to one-off costs associated with longer term repositioning, including the acquisitions of Dynalink New Zealand and of Askey Australia.