Strathmore price surges as it buys 50pc of CreditNet

By DITA DE BONI

Strathmore Group has made its second big purchase as a technology investment company, acquiring a 50 per cent holding in private, South Island-centred credit services company CreditNet International.

Strathmore's share price surged almost 40 per cent yesterday on the news, to close up 14c at 51c.

The company will pay $1.15 million over 15 months for the shareholding and will have an "active role within CreditNet, representation on the board and the ability to influence company direction," said Strathmore chairman Phil Norman.

Strathmore would provide capital and value-added services for CreditNet to broaden its scope within New Zealand and to "appropriate" international markets, he said.

CreditNet operates as a debtrecovery, credit-reporting, repossession and ledger-management company.

It employs about 20 people in offices nationwide and has been developing a browser-based service over the last year to complement other business.

Mr Norman would not disclose sales figures for the company.

Strathmore director Don Cowie told the Business Herald that CreditNet had a "modest market share" against main credit services rival Baycorp Holdings.

Mr Norman would not comment on Strathmore's escalating share price, saying the market would make a final judgment on how well the company was run.

"There aren't many vehicles the public can invest in [for] internet and technology-based stocks. There's a level of demand, interest and anticipation," he said.

"Prices of internet stocks internationally are very high right now - New Zealand can't remain isolated forever."

Some cash floating into Strathmore from the company's current share issue would be used to pay for the CreditNet holding, and the remainder would augment a capital base for further technology investments.

It was also announced yesterday that 31 per cent Strathmore-owned telecommunications and internet software company CommSoft had secured a deal with Panasonic to license its web-enabled communications software in Europe.

CommSoft Group said the deal was worth about $1.5 million a year in the British market alone.

The company, operating in New Zealand, Australia, Singapore and Britain, said sales and support staff would increase from 15 to 50 in Britain to drive market expansion.