SmartForce chairman to resign following restructure of board

SmartForce, the e-learning group, will announce plans to restructure the board and bring in a number of new non-executive directors, after which chairman, Mr Bill McCabe, will resign.

Mr McCabe founder of CBT - it was later transformed into SmartForce - sold around $40 million (€44.5 million) worth of CBT's shares in 1997 before the share price collapsed. But in a confidence-building exercise, he returned as chairman in 1998, and bought a substantial amount of shares. He has overseen the group's move into e-learning and a surge in the share price - it has soared from $14 9/16 to $60 7/8 in the past 12 months - and closed at $53 down $1 1/16 last night.

Mr McCabe now holds 4.6 million shares and options with a value of $253 million. He does not intend to sell any of these shares, a spokesman said. Asked about the pending class actions against the company and some of the directors, he said the company had not heard anything but if any emerged they would be vigorously defended.

A statement from SmartForce will say Mr McCabe plans to restructure the board. As part of the process a number of non-executive board members will be appointed. These appointments, the statement will say, will bring to the company global technology and Internet expertise and it is anticipated that this process will take three to six months but could take longer. On completion of the exercise, Mr Greg Priest, president and CEO of SmartForce, will assume the joint position of chairman and chief executive officer. Mr McCabe would then stand down as chairman but would serve as a special adviser to the company. The plan is to get two to three high-profile non-executive directors with Internet experience. Not much change in the thrust of the company is expected as Mr Priest has been to the forefront in the recent drive to push the group forward. It is now capitalised at $2.8 billion, making it the largest e-learning company in the world.

The company's latest results showed better than expected results in the second quarter to June 30th, 2000, with a net loss per share of 15 cents compared with an estimated loss of 17 cents.

While revenue fell to $36.4 million from $47.2 million due to the changed nature of its business, it significantly exceeded analysts' estimates.

Mr Priest said: "Customers continue to adopt SmartForce e-learning at rates far in excess of our original expectations, allowing us to generate a substantial backlog as the base for future business growth."

The backlog of contracts by the end of the year should be $350 million, Mr Priest said, and this would feed into 2001 and 2002. In actual growth terms, he added, the company was growing at about 30 per cent compared with 20 per cent last year, indicating an accelerated growth.

SmartForce yesterday announced its participation in The jCert Initiative, a collaboration between BEA Systems, Hewlett Packard, IBM, Oracle, Sun-Microsystems, Sybase and iPlanet E-Commerce Solutions to establish knowledge standards and vendor-neutral certification for Java (TM) professionals.