Battered Brocker pulls the plug

By PETER GRIFFIN

Auckland-based Brocker Technology is pulling out of New Zealand after a tumultuous year of job cuts, restructuring and spiralling losses.

The move will mean 20 redundancies in the weeks leading to Christmas, including Brocker's chief executive, Richard Justice.

In January, Brocker employed 250 people.

Mr Justice said fraud in Brocker's Australian subsidiary, evaporating margins in its distribution businesses, the Nasdaq downturn and terrorist attacks in the United States had combined to stop Brocker in its tracks.

"It was one thing building on the other. The more recent events were the last straw," he said.

Brocker's business will now largely comprise Fiji-based IT services company Datec, which Brocker bought last year for $37 million.

About 20 staff associated with Brocker's IT consultancy arm, Certus, will remain in New Zealand to look after existing customers.

Brocker's online services division will be wound up.

In February, Brocker - which first listed in Toronto - revealed that improper invoicing in the accounts of Sealcorp Australia - its computer distribution division - had resulted in an overstatement of the company's revenue by $C4.5 million ($6.81 million).

Dozens of redundancies, the closure of under-performing divisions and a slide in Brocker's Nasdaq share price followed.

In July, Brocker's Sealcorp business was forced into liquidation by creditors that included Compaq, Novell and visual technology specialist Silicon Graphics.

In total, eight creditors were collectively owed more than $1 million.

The company reported a loss for the March year of more than $C19 million.

New Zealand's sole tech company represented on the Nasdaq, Brocker now faces a battle to maintain its listing.

This year, Brocker undertook a four-for-one share consolidation to meet Nasdaq listing requirements specifying a minimum share price of $US1. Since then Brocker's share price has fallen to around 40USc (96c).

Mr Justice said Brocker faced the same difficulties as a host of listed tech sector players struggling with eroded share value.

"As we understand it, in excess of a quarter of the companies listed on the Nasdaq could be in breach of the previous listing requirements," he said.

After the September 11 attacks on New York's World Trade Center, Nasdaq suspended its minimum bid price and public float requirements until January 2, giving Brocker and other sagging "penny stocks" a reprieve.

Normally a firm trading below $US1 for 30 consecutive business days would have only a 90-day grace period before being delisted.

Brocker's departure adds to a long list of IT companies shutting their doors on New Zealand.

In recent months several companies including Ariba and NetRatings have scaled back their operations to Australia.