Jade Software split in two

Jade Software split in two, USA Health takes logistics unit as minority investors exit

By Paul McBeth

July 11 (BusinessDesk) - Jade Software has been split in a shake-up of ownership that's left UK non-bank lender Skipton Building Society holding the digital arm and USA Health with the logistics unit.

The board, headed by Callaghan Innovation chair Sue Suckling, recently completed a strategic review of the Christchurch-based software developer and decided to split out Jade Logistics from the group, echoing a similar move five years ago when Jade spun out Wynyard Group just 13 months after establishing the now-defunct intelligence software developer.

The split has seen the bulk of Jade's minority shareholders, including founder Gil Simpson, exit the register. Skipton Investments lifts ts stake in Jade Software to 99.92 percent from 56 percent and USA Health owns 99.92 percent of the newly-incorporated Jade Logistics Holdings, having previously held a 26 percent stake in the wider group.

No price was disclosed for the shareholders who sold. Companies Office filings show Paul Ainsworth, Kevin Douglas, Angus Strong, Deborah Smith and Lynda Raina as the remaining minorities in the two Jade groups.

"The logistics business under USA Health’s ownership will continue to invest in growth and research and development, while Jade Software under Skipton Investments’ ownership will continue to focus on building the solutions and operations business for long-term sustainability, as well as continued investment in the JADE technology," a spokeswoman said in an emailed statement. "Both businesses will remain headquartered in Christchurch and all existing staff have been retained."

The restructuring has also seen USA Health's Roger Bhole and chief executive David Lindsay depart the Jade Software board on June 30, leaving Skipton’s Alex Robinson and Henry Varney and independent directors Julia Raue and chair Suckling. Former Air New Zealand chief information officer Raue and Suckling were relatively recent additions, joining in April 2016 and last October respectively.

Jade filed its annual report last month showing a narrower loss of $942,000 in calendar 2016 from the $3.5 million deficit in 2015 on a 24 percent increase in revenue to $37 million. The majority of that growth was from the logistics unit where revenue jumped 55 percent, and outpacing a 13 percent increase in revenue from its digital solutions business.

The company had previously been targeting an early return to profitability on the strength of its port management software, however the annual report said the logistics business won't turn a profit in the medium term as it spends more on developing new products and expanding its market share until it establishes "further critical mass" to "deliver long-term profitability".

Jade spent $2.1 million on research and development in 2016 compared to $2.2 million a year earlier and received Callaghan R&D grants of almost $407,000, down from $543,000 in 2015.

The accounts valued Jade’s total equity at $14 million as at Dec. 31, with $25.6 million of assets and $11.7 million of liabilities. The software developer burned through $4.6 million of cash in 2016, mainly due to a $3.6 million of investment in buying and developing software. That left Jade with cash and equivalents of $5.2 million at the balance date.

Under the split, group chief executive Lindsay will now head up Jade Logistics and former Microsoft New Zealand enterprise director Jason Court will act as interim CEO of Jade Software under a permanent replacement is found. Lindsay is currently the sole director of Jade Logistics

BusinessDesk receives assistance from Callaghan Innovation to cover the commercialisation of innovation.

(BusinessDesk)

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