Dicom (LSE:DCM)
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DICOM Group plc (“DICOM”),
a leading provider of Intelligent Capture & Exchange solutions, submits
the following update on its business activities.
Current trading
DICOM expects its results for the six months ended 31 December 2007 to
be in line with expectations. The Company has achieved its stated target
of double digit revenue growth in constant currencies in its software
business with a higher than expected contribution from software services
offsetting lower growth in software licenses in the second quarter. The
results will be announced on 18 February 2008.
Strategic review
On 5 November 2007, Reynolds Bish joined DICOM as CEO. Since his
arrival, Mr. Bish has conducted a thorough review of the strategy,
structure and branding at the company. Following this review it is clear
that certain additional measures are now needed to accelerate progress
with DICOM’s stated strategy of focusing on
the software license and services portion of its business.
As a result of Mr. Bish’s analysis, DICOM’s
organizational structure will be reorganized to better align and focus
its resources. In the past, most line and staff functions were
decentralized and widely distributed throughout the world, with both
regional and country managers acting as general managers and being
responsible for all of these functions and for revenue generation. With
this reorganization, all line and staff responsibilities will be
consolidated into vertically aligned, worldwide functions under global
managers reporting to Mr. Bish. The essential purpose is to execute in a
more consistent and cost effective manner and to focus management
efforts more clearly on revenue generation activities.
In addition, DICOM’s sales function will be
reorganized to better align and focus its resources. In the past, the
sales function was decentralized and widely distributed throughout the
world, with regional and country managers being responsible for selling
all of the company’s products. With this
reorganization, the sales function will be separated into three groups
better aligned with DICOM’s products, markets
and customers, namely: (1) software and solutions, (2) OEM software,
including the market leading embedded VRS technology, and (3) European
hardware distribution business. To further optimize this structure and
improve sales productivity over time, the company has initiated a search
for an Executive Vice President of Worldwide Field Operations to manage
the sales function on a global basis, who will be based in Irvine,
California and report to Mr. Bish.
As part of these changes, Urs Niederberger, DICOM’s
Chief Operating Officer and an Executive Director, will leave the
company as of 15 February 2008 and stand down from the Board of
Directors immediately. The Board extends its thanks to Mr. Niederberger
for his valuable contributions over the past ten years and wishes him
well in his future endeavours.
Brad Weller has been appointed as General Counsel, and Company Secretary
with immediate effect, replacing Stefan Gaiser, who remains the CFO and
an Executive Director of the Company. Mr. Weller has had a very
successful career both working as an attorney at a law firm and as an
in-house attorney at a number of publicly-held technology companies,
including Captiva, where he worked for Mr. Bish as General Counsel.
Also as a result of this review, the Board is proposing to change the
name of the company to “Kofax plc”.
There has been confusion both internally and externally over the various
brands used by the company in the past, many of which have arisen
through acquisition. Among all DICOM brands and products, Kofax clearly
emerges as the brand with the highest awareness among stakeholders on a
worldwide basis, having been recognised as the leading capture software
for the past twenty years. Furthermore, the respected products and
innovations that have emerged from Kofax most closely define the
direction in which the company is now heading.
As a consequence of the corporate rebranding and restructuring, DICOM
will make approximately 50 redundancies, close certain facilities and
record an exceptional charge of GBP 3.5 to GBP 3.8 million in the second
half of financial year 2008. This is expected to result in significant
annual cost savings and allow the Board to increase investment in the
company’s software and solutions business.
A Notice of Meeting will be sent to shareholders to convene an
Extraordinary General Meeting at 11.00 am, 18 February 2008 at the
offices of Landsbanki to seek shareholder approval for the proposed name
change. If shareholders approve the new name, DICOM’s
ticker symbol on the London Stock Exchange is expected to change from ‘DCM’
to ‘KFX’ with
effect from 19 February 2008. The ISIN number for the company’s
shares would remain unchanged.