Iona shares increase by almost 8%

SOFTWARE group Iona Technologies saw its shares rise by almost 8% after it released strong fourth-quarter figures yesterday.

Total revenue for the three months to December was $23.4 million (€18.6 million), a 35% increase on the previous quarter.

Iona co-founder and chief executive Chris Horn said the results showed continued progress and that the company’s new Artix product was well-positioned to take advantage of the growing web services market. Artix aims to reduce the complexity associated with integrating information technology (IT) systems and help cut business IT costs.

“It’s a very strong set of numbers and far ahead of market expectations,” said Davy stockbrokers’ analyst Barry Dixon.

The company recorded a net profit of $1.8 million, or 5c per share, before a restructuring charge of $6.6 million. Market analysts had expected a loss before restructuring charges of 1c per share. Mr Dixon said Iona’s future prospects were good and that the market would take considerable comfort from Iona’s ability to grow its licensing and software sales, which deliver a higher margin. Sales for this sector were 75% ahead of the previous quarter.

Mr Dixon said the fourth quarter was traditionally a strong period for Iona, due to seasonal factors, but that even allowing for this, sales were 20% ahead of his forecast.

The company also signed four sales deals worth over $1 million each during the quarter, which suggested deal sizes were beginning to show signs of recovery. Iona was now a successful turnaround story with a stable outlook, said Mr Dixon. Iona shares rose to $7.69 yesterday but still remain a long way off the peak reached in 2000, when the share price exceeded $100.

The company said it expected first-quarter revenue in 2004 to be in the region of $18 million and that total expenses would match this figure.

Chief financial officer Dan Demmer said the group now had over $57 million in cash and that its significantly reduced cost base left the company well positioned to deliver a sustainable performance in the future. The company spent over $20 million during 2003 in restructuring its business. Net losses for the year fell from $369 million in 2002 to $44.2 million.

The company also announced yesterday that it had appointed William McMurry as its new vice president in charge of worldwide sales.

Mr McMurry has over 20 years’ experience in international sales and previously worked with a number of well-known technology companies, including computer giant IBM.