Infobank goes to AIM for e-commerce funds

Shake-up at reseller following two profit warnings and two board-level resignations.

Infobank International launched a £8.9 million fundraising initiativeignations. on the AIM last week to help fund the e-commerce arm of its business, following a two-month financial review and board-level resignations.

After two profit warnings and a poor set of half-year results, chairman David Fraser and managing director Joseph Pillai stood down from the Infobank board two months ago. Twenty-five people were made redundant and the re-seller folded its services arm, set up earlier this year, back into the reseller unit of the business.

Channel sources suggested that Infobank's board reshuffle may have been caused by internal opposition to diverting revenue from the reseller arm into the development of InTrade, its internet-based enterprise resource planning (ERP) and e-commerce product.

Graham Sadd, chief executive of Infobank, said the resignations had been voluntary, and that former chairman Fraser was still involved as a non-executive director, while Pillai is 'pursuing other interests'.

One source commented: 'Setting up such a project will require deep pockets to make it work and it will be a long time before it starts making money for Infobank. Having said that, if it's successful, it will be phenomenally successful.'

Sadd said the fundraising initiative had been designed to enable Infobank to continue to develop InTrade. The product has won significant custom from firms including Hewlett Packard, KPMG and BT, but has thus far failed to generate revenue for the company.

Infobank saw its losses reach £2.9 million for the year ended 30 June, despite a 76 per cent increase in product sales and a 90 per cent increase in total revenue.

Sadd said: 'In revenue terms, our reseller business will generate the majority of our business for the next calendar year. We won't see any significant income from InTrade until then, but we want to put finance in place to help us achieve market domination with this product.'

He attributed the company's poor results to costs associated with the setting up and marketing of TrustMarque, the company's digital distribution and intellectual rights division.