"We made a capital return after we sold [Field Solutions] and I won't pre-empt the interim, but I'd like to think we'd give one. We should be in the position of paying out about 60 per cent of profits," Lord says.
Field Solutions was an environmental services business UXC sold for $45 million in cash last year. After the sale, Lord stepped down as executive head of UXC to be replaced by Cris Nicolli. Lord takes aim at critics that say his influence is all pervasive at the company he started in 2002.
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"My influence is limited to being a non-executive chairman and to owning 8 per cent. I mean, we're
the largest of the Australian-listed IT groups and we've brought the company back to basically being debt free."
The former head of Elders IXL's resources arm is smarting about fund manager comments in last week's column that it wasn't "institutional grade". He is also not happy that at its AGM in November more than 10 per cent of the company's shares were voted against his re-election onto the board.
Lord says he has stood for 87 elections and never had a high disapproval rating ''until I got Sydney-based institutions voting against me".
But as Radar reported last week, two funds (Sydney based) are buying back into a story that many brokers are also beginning to support.
Lord says he aims to improve margins and to build revenues up to $800 million a year. The key to growing revenues is the applications division. UXC is the largest independent provider of Oracle and Microsoft products. Management is also working on taking $10 million of costs out a year.
At 41¢, UXC has a PE of seven times, which puts it on a discount of about a third to its Australian-listed competitors such as SMS Management & Technology (SMX), which trades at over 11 times.
If the UXC management team can achieve its aims, this discount should come in.
GOING HI-TECH
The stock exchanges around the world are mostly run by behemoths, fighting to maintain monopolies and jockeying for positions in a world dominated by sophisticated computers and high-frequency trading. NSX, Newcastle's Stock Exchange therefore seems an anomaly, relying, as it does, solely on telephones to conduct business. At 19¢ a share, its market cap is $19 million, and as far as we can tell, it has never turned a profit in its seven or so years as a publicly listed company.
This is all set to change, according to newly installed chief Emlyn Scott, who previously worked at the London-based clearing house, LCH Clearnet. Next month, the ASX-listed exchange is set to launch its own trading system allowing brokers to trade electronically. Its ambition is to list many little companies, which find the ASX too expensive, and too onerous. For example you need to have at least 500 different shareholders. On the NSX you need just 50.
The NSX could hardly have picked a more difficult time to embark on this journey to profitability with very few initial public offerings generating positive returns these days. This column will be watching with interest.
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