Provenco eyes overseas opportunities

Retail payment technology provider Provenco is looking for opportunities to expand overseas and expects double-digit revenue growth this year.

Chief executive David Ritchie told yesterday's annual meeting that partnerships with companies such as Shell and Petronas would be increasingly important as Provenco looked to expand and develop new markets.

"We will continue to evaluate new international opportunities with a special focus on markets like China, greater Asia, India and Europe," Ritchie said.

The company's Vantex technology distribution business had recently entered into Asia, buying the Identics group of companies in Malaysia and Singapore.

"We believe that the Asian region will deliver good growth prospects for Vantex," Ritchie said.

"Our business model has proven to be very successful and we know it is transportable into other markets."

Revenue in the last financial year was up 33 per cent at $153.9 million and chairman David Wolfenden said the company was positioned for more growth in the current financial year.

"We anticipate double-digit revenue growth for the 2007 financial year," Wolfenden said.

However, anticipated solid growth in the retail automation business - focused on the petrol station sector - would be mostly realised in the second half of the year because of "timing movements" with offshore contracts.

"In summary, this will result in lower returns in the first half of this year, compared to those predicted for the second half," Wolfenden said.

Trading profit for the last financial year was $14.6 million - a lower growth rate of 6 per cent.

The lower growth reflected the increasing significance of Vantex, which generated high revenue but was a lower margin business.

Business in the domestic Eftpos market would be quieter, with the first EMV security-standard update deadline of December 2005 having passed.

The second deadline for older non-compliant terminals to be replaced was December 2007, with currently about one-third upgraded and about 60,000 terminals still to be changed.

Ritchie said the company's petrol station business faced more opportunities on a three to five-year horizon than ever before. The company was actively pursuing the growing Chinese market.

"We are currently installing full solutions for the state-owned Chinese oil company Sinopec in Hong Kong," Ritchie said. "Sinopec is a major player in the Chinese region and we are now strategically positioned with the company, with a view to realising further opportunities in China."

Provenco's share price was unchanged at 96c.