Zaptronix invests in new technology

Johannesburg, 01 Dec 2006

JSE-listed electronics and communications firm Zaptronix has reported a bottom line loss in its year-end results, but says it has invested in new technology.

The company reported revenue of R20.8 million, down from last year's R28.3 million. Its after tax profit came in at a R19 000 loss, while, in 2005, it reported a net profit of R3.76 million.

It said shareholders should note that the current 12-month period is being compared with a 16-month period. On a like-for-like basis, turnover was still down, but gross profit improved by 2% over the annualised prior 16-month period.

In the company's commentary, released to shareholders this morning, it said the year to end-August was a time of investment. Zaptronix said it invested in the quality of the technology platforms used by the group.

"The complete functionality of the tracking technology was delayed by a year leading to minimal growth on the annuity revenue of the business. The foundation has, however, been laid for the successful roll-out of the technology platform to new and existing clients."

While no tenders were awarded to the group in the past year, it is confident of winning tenders going forward. "The group further sees government tenders as a strong enhancer of non-annuity revenue and is actively pursuing this potential business."

New technology

Zaptronix said further investments in new technology include the development of prediction software in the mobile logistics environment, currently called FX. In addition, an extension of its communications technology into the metering business is being pursued.

Cash generated by operating activities, of R1.98 million, and loans of R1.83 million raised by the firm was invested in the purchase of tangible assets.

These are intended to "generate the future revenue streams for the business channels, being rental of the assets to clients and the service revenue streams, with further investment in finalising the mobiles logistics hardware, server and firmware software systems".

FX allows for the prediction and planning of clients schedules based on traffic density information. Management expects the product to be offered to clients in February 2007, following the integration of the system with the current platform.

"The extension of GPRS technology to energy management should place this business at a very competitive level."

By 1.15pm, the company's shares were trading 16.67% higher at 7c, having closed at 6c the day before the release of results.