Iona Technologies' return to the business model and operating profits it had last year would take some time, its chief executive, Dr Chris Horn, told shareholders at yesterday's annual general meeting. Iona, a maker of middle-ware programs which allow other software to work together, made a loss in the first quarter which drove the share price down by more than 50 per cent.
"Our own view is that it will take a few quarters to return to the successful business model we had in quarter three and four of last year," he said. Iona now had to concentrate on growth and organisation. "The key challenge for us as a company is execution, the key challenge is really internal. . . Internal execution has been the challenge in the past, I believe it will be the challenge in the future. It is not the competitors, it is not the customers, it is not the market," he said. Iona was in a rapidly-growing market with technological leadership and successful customers. There was now a sales staff of 150 out of a total employee number of 620. The company's focus was on the current quarter and when it got the results for it, it would be better positioned to know how soon it would return to last year's profits and growth.
Commenting on the share price, which, at the close of the Dublin Stock Exchange yesterday stood at $15.875, Dr Horn said he believed many investors were waiting to see the results for the current quarter. The price is just over half of what it was prior to last April's profit warning.
The general consensus among analysts, he said, was that there would be a small profit of one or two cents earnings per share (eps) in the second quarter, as opposed to the two cents per share loss in the first quarter, which amounted to $400,000 (€371,000) in total. Its eps peaked at 23 cents in the fourth quarter of 1998.
Asked about listing on other exchanges, he said the company was not considering the issue at this stage. Since listing on the ISEQ, the proportion of European investors had grown and probably exceeded US institutional investors, Dr Horn added. Market conditions remained potentially very good and the opportunities were out there.
Iona has the option of buying back up to 10 per cent of its own shares, but Dr Horn said he felt the company's cash would be used to grow the business and possibly engage in acquisitions. "A significant proportion of my time is spent looking at candidate companies on a worldwide basis."
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