Skipton buys large slice of Jade

Sir Gil Simpson will maintain an active role in Jade. Picture / File

British financial services institution Skipton Building Society has emerged as the largest shareholder in Christchurch-based Jade Software.

While Jade has still not updated details of its shareholders at the Companies Office, Skipton's annual report shows it has a 48 per cent stake in the company after last December's capital raising.

It said Skipton had worked with Jade for more than 20 years to develop its core systems and the shareholding "will enable the society to have greater involvement with the growth of Jade as it develops its world-class technology".

Jade chief executive Rod Carr said Skipton "liked the meal and wanted to eat more".

Carr said previous largest shareholder, USA Health Investors, had its stake reduced from just under 33 per cent to about 20 per cent.

Founder Sir Gil Simpson's stake was diluted to under 10 per cent, although he continues to have an active role as president with responsibility for handling the independent software vendors (ISVs) who develop their solutions for Jade technology.

Simpson stemmed some of the dilution by buying 2.11 million shares from Sir Tipene and Sandra O'Regan, who were early investors. Venture capital firm I-Cap Nominees has a stake of about 10 per cent. The exact stakes held by other shareholders are unlikely to emerge before the company's annual meeting in May.

The capital raising allowed Jade to pay off convertible notes and remaining debt, pay out a staff shareholding scheme which had become a potential barrier to future expansion and clean up the balance sheet.

Carr said there was no risk of Jade becoming just an in-house development shop for Skipton, which has 8.1 billion ($21 billion) in assets and made a pre-tax profit of 79.7 million last year.

"Skipton has made it clear the best way to protect its investment is that there be a broad base of committed Jade users around the world."

One of Skipton's smaller competitors, Ipswich Building Society, has just bought a new customer management system from Jade.

Ipswich head of marketing Joanna Leah said the society had used Jade for its core system since May 2003 and was confident about the performance of the technology.

"Using Jade allows us to embed our CRM system within the core system. This will not only ensure us the high quality of data we need but also save substantial time and costs by not having to switch between or connect disparate technologies," Leah said.

The Jade CRM system would be implemented in 12 months, a shorter time than was possible with many competing systems and it cost significantly less than the others considered.

Leah said Jade CRM would allow staff to see all contacts with a customer from any part of the business.

"It allows us to recognise their specific requirements at a glance, then provide a more informed and tailored service from any point of contact," she said.

Carr said Jade had bucked the industry trend towards specialisation and fragmentation by retaining control of a surprising amount of its "technology stack", from its object-oriented database to the tools needed to build applications and turnkey solutions on top of it.

"Now the industry is trying to reaggregate. After saying fragmentation is okay, it now realises if you slice the stack too much, integrating things leads to accidental complexity," he said.

Carr said all parts of Jade's business were performing well and the company had double-digit growth last year.

In 2003, it lost $15.6 million on operating revenue of $30.3 million, leading to redundancies as Carr, a former Reserve Bank deputy governor, moved to bring costs in line with expected income. He said the student management and port management products were winning customers, and licence income from independent software vendors had doubled.

Jade missed out on being part of any of the consortiums selected to build new electronic patient records and management systems for Britain's health systems, but the huge scale of the exercise means there are serious doubts about whether the chosen implementers can deliver.

"Healthcare is promising - we have had re-entry to discussions in the UK," Carr said.

Jade is banking on good revenue from JET, its process for converting mainframe computer systems from Linc, the development environment which runs on cheaper Intel-based servers.

Carr said Jade's human resources and payroll systems were winning new customers after some further development. "We now have career planning, online access to leave applications, all that other good stuff people expect today," Carr said.

Jade has also signed deals with two established customers for large custom developments.