Technology firm spots opportunity

By ADAM GIFFORD

Provenco's annual meetings may be missing the razzle-dazzle of days past when the former Advantage Group was a dotcom wannabe, but those few shareholders who turned up yesterday heard a gratifyingly sober tale of real profits and real prospects.

Chairman David Wolfenden reiterated a forecast of between $4.8 million and $5.2 million for the year to next June.

He said a dividend might be paid if the forecast was met.

Last year the company made an after-tax loss of $6.4 million, after restructuring costs and a $6.6 million write-off of intellectual property assets.

"This write-down does not reflect on the quality of the assets but rather on the uncertainty of future sales in markets that are extremely hard to forecast."

Managing director Tony Bradley said the company had pared down its activities to focus on clear strengths.

"We aim to be the technology supplier of choice to domestic retail and distribution industries and to the retail petroleum sector internationally," he said.

"Domestically that is a sizeable business, and it is much more than point-of-sale terminals - it includes all the technology from the time of manufacture, when the barcode is put on, through the distribution cycle to the retail point of sale."

Bradley said software development was now there to support the core business.

The $6.5 million acquisition last month of bar code and point-of-sale system distributor Transtech allowed Provenco to reach more small and medium business customers rather than relying on large corporates.

He said 75 per cent of the business was in the domestic market, but international sales were likely to grow as oil companies started investing again in technology.

The industry was being forced to upgrade its point-of-sale terminals to take EMV smart cards, which included chips meeting a new standard developed by major credit card companies.

"Our technology allows oil retailers to become compliant. There is nothing else on the market yet which allows them to do that," Bradley said.

"We are extremely well positioned because of a large contract with Malaysia's state oil company, Petronas, to install an advanced payment system. Malaysia will be the first country in the world to be EMV-compliant."