Investment column: Infobank

OF COURSE Infobank International's boss, Graham Sadd, says his company is hugely undervalued - it's a loss-making Internet company, so it must be worth billions. The comparators for the AIM-listed company capitalised at pounds 38m are the Nasdaq companies, Ariba and Commerce One, worth $6.7bn and $1.4bn respectively. All three provide on-line software which for mediates between companies and suppliers of the things those companies need to do business, such as stationary, rather than the components of their products. Handling those orders on-line is far cheaper than processing them using paper.

Infobank lost pounds 7m on sales of pounds 39m last year. Ariba meanwhile lost $11m on $8.4m sales. Commerce One fared worse. Part of the Infobank's popularity problem is that its sales came largely from a non-core software reselling business, Software Corporation. The company also has a chequered record - its shares crashed last year after expansion went horribly wrong. The core InTrade business was set up only in November, whilst Ariba and Commerce One are seen as having the lead in the US market.

But Infobank is now setting its sights on the US and Europe, and has clinched a deal with Resultum, a Dutch Internet company in the same business, to have its product sold to Resultum clients, who include Sony and Philips. On the assumption that people like doing business with people they know, the deal is a sign that Infobank may well be successful in attacking the immature European on-line procurement industry. The shares closed up 5p at 121.5p yesterday and investors should need no Dutch courage to take a punt on them.