Cadmus chasing business worth $60 million

By PETER GRIFFIN

Listed technology company Cadmus Technology may have to go to the market to raise funds for expansion as it pursues potential business in New Zealand, Asia and Australia worth $60 million.

The company, which has 15 per cent of the local payment terminal market, has appointed distributors in Malaysia and the Philippines and is exploring opportunities in Singapore and Indonesia.

The Australian market alone may be worth up to $30.4 million for Cadmus, which is in discussions over a contract for 16,000 terminals worth $12.8 million.

New banking regulations in the Australian market mean up to 350,000 terminals will have to be replaced over the next few years, creating further opportunities.

Managing director Ian Bailey told Cadmus shareholders at the company's AGM in Auckland on Friday that the company was aiming for a small portion of terminal sales in the Asia Pacific region - estimated at 939,000 last year.

"If we can get 70,000 terminals out of that it's not a bad chunk of the market," he said.

A much-hyped deal with energy provider TrustPower was finally gaining momentum, with 1000 terminals in production, he said.

The expansion of the scheme, which allows consumers to pay bills from their home using a card-enabled telephone, had been delayed by the insistence of the major banks that the system be able to accept debit cards.

"As far as TrustPower is concerned, if we could have delivered it yesterday, that would have been great," said Mr Bailey.

Cadmus may also build on a $2 million contract signed with BarterCard, which wants to increase its merchant base in New Zealand to 4500.

Despite a bleak year for IT stocks and less-than-impressive bottom-line results from Cadmus, Mr Bailey said the company was in no danger of joining the great IT wreck.

"The world of commerce doesn't stop. None of those companies had products. FlyingPig was a service; we've got products and intellectual property."

Cadmus achieved sales of $7.5 million for the period ended June 30, but posted a loss of $1.52 million. In the quarter to September 30, it announced before-tax earnings of $135,000 on revenue of $1.613 million.

Greeting shareholders for the first time was former IT Capital managing director Keith Phillips, who joined the Cadmus board three months ago.

Mr Phillips also heads the boards of IT Capital , Deep Video Imaging and corporate travel software company GlobalPro.

Remuneration was on the agenda for Cadmus shareholders, who questioned the issue of six million share options to non-executive directors and a further six million share options to employees, potentially diluting Cadmus' share capital by 8.6 per cent.

The resolutions were passed overwhelmingly.

But there were no dissenting voices on moves to cap total non-executive directors' fees at $20,000 a year and the passing of a resolution requiring 75 per cent support to alter the company's constitution.