Strategic Review and Restructure Announced
1 September 2006
Media Release: For Immediate Release
Plus SMS Holdings Limited Announces a Strategic Review and Restructure
Auckland, New Zealand:
Plus SMS Holdings Limited [PLS] has announced a change in
its Board of Directors as part of a strategic review and
The NZAX-listed company sought a trading halt on Wednesday.
Garry Donoghue has resigned as an executive and member of the Board of the Company.
Mr Donoghue has agreed to give back all of the shares beneficially held by him in the Company. Mr Donoghue explained this was because during his tenure, the Company had not achieved its goals and objectives, and he believes it is in the best interests of the shareholders for him to resign and return the shares to the Company. This resolves all issues between Mr Donoghue and the Company. The return of shares is conditional on board and shareholder approval.
The Board announced the retirement from the board of Mr Jim Bracknell. Jim leaves to pursue other interests.
Mr George Brooks, CEO of executive selection company OCG Consulting Limited, has joined the Board as an independent director and Chairman. Mr Jock Irvine and Mr Christopher Tiensch remain Directors.
“Although these arrangements have come together rapidly, the Board believes the changes offer the best results for all shareholders, and give the company a robust governance structure to move forward,” says Mr Brooks.
In June, the company appointed international telecommunications expert Christopher Tiensch as Chief Executive of the company’s operating subsidiary, Plus SMS Limited.
Mr Tiensch has begun a review of the company’s strategic operations and commitments. This ongoing review has identified a number of issues with contracts negotiated and previously announced by the company.
“The company has made what in hindsight appear to be a number of unrealistic statements,” says Mr Brooks.
He says the contracts will be reviewed individually and examined in light of the company’s growing knowledge and newly assembled expertise in the field, and re-negotiated where necessary. [Please see attached table, Appendix 1, for remarks on the status of contracts, and previous statements].
The Board is taking a number of proactive steps to secure the company’s future, including:
- Identifying opportunities to diversify revenue streams;
- Appointing a new management team, led by Mr Tiensch, aimed at strengthening technical capabilities and presence in key international markets;
- Prioritising the establishment of an operations centre based in the UK to support the international exchange of messaging and content services;
- Undertaking a thorough review of existing contracts and strengthening and renegotiating commitments (where necessary) with the company’s partners
“As a result of these changes, there is now no prospect of revenues this year,” says Mr Tiensch. “In addition to pursuing our current business plan, we are investigating a range of alternative revenue streams which can be implemented over the next year.”
However, Mr Tiensch is positive about the commercialisation potential of the Plus SMS concept and says the company will continue to pursue its ambition to list on the AIM Market of the London Stock Exchange.
“The company has a promising, pioneering concept, one that is at the leading edge of interactive mobile services,” he says.
“We’ve secured the ongoing commitment and support of cornerstone shareholder Hewon Capital Limited to support our future growth and we have the benefit of a world-class global Advisory Board.”
“The Directors, Advisory Board, and our partners remain optimistic about the potential of this business concept, but we are realistic about the challenges and difficulties of realising its potential, and the time it will take to do that.”
“The concept has been independently validated this year by a leading UK telecommunications consulting firm,” added Mr Tiensch.
“Delivering this commercially is a complex endeavour. With the combined knowledge of our new Advisory Board and new management team to support us during this period of review, we’re confident we will be able to develop our position in the market.”
The delay in achieving short term goals is a frustrating one for the Company, and Mr Tiensch acknowledges that it will extend the timeline for reaching certain milestones.
“I understand that shareholders will be disappointed by a delay in achieving positive revenue flows. However, by making these changes - reviewing and renegotiating contracts where necessary, opening an operational centre, and transitioning to a highly qualified international management team to lead our future efforts - I’m optimistic we’ll get the company back on track.”