Fuji Xerox NZ managing director Peter Thomas has confirmed that Japanese parent Fuji Xerox was considering selling its New Zealand subsidiary earlier this year before the government lifted the company's suspension from government printing contracts, according to a report in The New Zealand Herald.
|The FXNZ board (l-r): Graham Ford, Takaya Mogaki, Nobuhiko Koshimizu, Mutsuki Tomono, Peter Thomas and Katsumi Kizaki|
Fuji Xerox NZ returned as a provider of print technology and logistic services to NZ government customers from May 1, on a probationary basis, 20 months after the agreement was suspended over an accounting scandal that's still under investigation by the Serious Fraud Office (SFO).
Before the reinstatement was announced in April, financial advisor Deloitte had put together a presentation in March that called for expressions of interest to acquire Fuji Xerox NZ and Fuji Xerox Finance - described as a “trusted global brand with significant product portfolio growth opportunities,” according to the Herald report.
“The Deloitte document talked about the opportunity to expand the business and recover market share lost due to the negative impacts on the company’s reputation,” said the report. “The turnaround plan included a $25m lift in earnings with price increases, inventory reduction and headcount reduction." It forecast earnings of $15.1m for the 2019 financial year, a turnaround from the company’s $10.1m loss in 2018.
Deloitte said $6.4m of additional earnings that could be gained from separating the NZ business from Fuji Xerox Asia Pacific. Other benefits included a $1m saving from moving the company’s call centre from Malaysia to New Zealand and $1.4m from “additional headcount reduction."
|Peter Thomas, MD Fuji Xerox NZ|
Fuji Xerox NZ MD Peter Thomas confirmed that the Japanese-based parent company had considered a sale process, said the report.
“However, following this review, Fuji Xerox New Zealand’s shareholders have determined that it will continue to operate as a wholly owned subsidiary and Fuji Xerox remains committed to the New Zealand market,” Thomas told the Herald.
A 2017 independent report ordered by parent Fujifilm revealed “inappropriate accounting” and a “sales at any cost” culture at its FXNZ and FX Australia subsidiaries had inflated revenue by $A450m between 2011 and 2016, including $350m from the New Zealand business.
Fuji Xerox’s Japan-based chairman, deputy president and two directors all resigned following the release of the report.
Fuji Xerox NZ filed civil proceedings in the High Court against three former senior executives – former FXNZ MDs Neil Whittaker and Gavin Pollard, and former chief financial officer Mark Allright. The case is continuing. The Serious Fraud Office is also investigating the matter.