Bank warns of IT investment crisis, as Cox buys NMT assets from administrator

A lack of investment in the information technology sector could mean companies missing their earnings forecasts for the March quarter.

This was the stark message from investment house Goldman Sachs, a week after Cox Retail snapped up the assets of broker software company New Millennium Technologies (NMT), which ran into difficulties, culminating in December.

Administrator Deloitte & Touche sold the company's assets on 23 December.

It is understood that Cox will maintain the existing broker system and will issue the next rating update on schedule, around the middle of January.

Cox Retail chief executive Neil Utley said that eight staff would be kept on. He added that these are technicians rather than managers.

Utley added that Cox is looking at ways of integrating its three broker systems: Brokersure, Brokersoft and NMT. He added that a decision would be made by the end of January.

Utley said that the NMT deal helps preserve the large Equity Red Star accounts among the NMT brokers.

He added that Cox looked at buying NMT earlier in the year, but was put off by the price and the amount of money it was losing.

NMT staff were told to go home on 20 December 2002. This was the deadline date the administrator had given the company to find a replacement for NMT's major investor, Highway Insurance.

In early December 2002, the insurer said it would honour its contract with NMT until the end of the year and then cease investment.