LCH.Clearnet, the clearing house which recently replaced both its CEO and chairman, is closing down its Generic Clearing System (GCS) project.
The company says a “review” of the GCS programme in 2005 had already concluded that part of the investment would not be brought into economic use and an impairment charge of €20.1 million was therefore recognised in the 2005 interim accounts.
Further work completed in June 2006 concluded that the further development of GCS was not economically or technically viable, and the Group has therefore decided not to continue to use assets from GCS within its technology strategy. An impairment charge of €47.8 million, which substantially relates to those assets, has been recognised and will be reported in the LCH.Clearnet Group Limited 2006 half year results to be published in August.
“It is very disappointing that the GCS project has not after all been able to deliver the solutions that had been anticipated,” says Chris Tupker, Chairman of LCH.Clearnet Group Limited. “However, the nature of the GCS design resulted in an over-complex solution both in terms of on-going production support, operability and development. This is the right decision to take: our short term focus will now be on the development of our existing systems so that our customers can continue to rely on our technical service with confidence. The Board has asked Roger Liddell, newly appointed Chief Executive, to prepare a long-term IT strategy for the Group.”