KEY POINTS:
Plus SMS will post another loss this year but with legal proceedings against its founder completed and a shift in focus, the company can finally look forward, says Chris Tiensch.
Plus SMS planned to enable global text-message campaigns and competitions using single codes but hit the headlines for
all the wrong reasons.
In September, founder Garry Donoghue and chairman Jim Bracknell resigned amid a scandal about incorrect business statements and the launch of an ongoing inquiry by the Securities Commission.
Shares that had once traded as high as 82c closed down slightly on Tuesday at 12.5c each.
But this month the company successfully forced Donoghue to return 85 million shares, worth about $11 million.
The legal action did not come cheap - Tiensch estimates the final bill will run to several hundred thousand dollars.
The returned Donoghue shares were cancelled but the same day another four million shares were issued to a former employee, not Donoghue, as part of a settlement deed to cover expenses.
There are no similar issues pending, Tiensch says.
"I think everyone involved is pleased that now that's behind us and we can really focus on the future."
Plus SMS shareholders will suffer a significant loss for the year ending March 31 but Tiensch is confident the new year will see the firm break even and generate $18 million of revenue - he even sees a chance of a profit.
"It was a tough turnaround but to achieve that goal to turn around the company in a little over a year's time and to break even, I think was a real stretch for the company but something we're on track to do," he says.
However, it has not been achieved under the original business model.
Tiensch, who became chief executive last June, says a significant shift of focus has now made manufacturing and distributing mobile phone content to operators, businesses and direct to users - including games, videos and music - the key part of the business.
In recent months Plus SMS has bought Mexico City-based Content Technology Mexico, Brazilian firm Mobile Development and Chilean company Multiecast.
The acquisitions have boosted employee numbers from less than 15 last year to about 100.
Latin American markets are booming, margins are high and Plus SMS has built a strong position, Tiensch says.
"We essentially now cover almost every single country in Latin America, which nobody else in the market can do or has done today."
South Asia is also a fast developing market "where people are consuming a lot of value-added services, a lot of content for their mobile services", Tiensch says.
"There's not a real entrenched internet society in these parts of the world and so a mobile phone is really their way to access news or content ... so those are the markets that we're really focused on."
The NZX-listed firm will relocate its operational business - called CRE8 - from Guernsey to the US in July, moving the firm closer to its markets and helping it source technical staff.
The relocation to Austin, Texas will also cut administration and operational costs by almost half, Tiensch says. "It's a great city for technical innovation ... and it has an enormous amount of research and development companies, especially in the telecom sector."
A messaging hub in Guernsey will be operated remotely from Austin and provide interconnectivity between mobile phone operators and act as a source for people accessing content manufactured by Plus SMS.
"It's operational today and we use it for example ... connecting all of the Latin American operators together and then transacting these messages for content services."
Meanwhile, the original idea that launched the firm - global text message campaigns - is now the lowest-ranked potential revenue stream, although Tiensch says the concept is still viable.
"Maybe it was a little bit ahead of its time ... If the market comes along and we see much more demand for these vanity global messaging services then we'll go after that business," he says.
The reality is that campaigns run by large corporates are essentially localised.
"The services that you offer for a company are quite different in Chile than they are in Mexico and that would be the same for Asia and Europe."
The company has enough cash for the coming year although Tiensch does not rule out raising more capital to accelerate growth.
