LUM 0.00% 2.3¢ lumacom limited

comparison - 12 months ago

  1. 214 Posts.
    Seeing we're in the process of rehashing past LUM announcements, I thought I'd post Sala's AGM address from last year.

    All I can say is "patience is a virtue"......


    Results of AGM

    Document date: Wed 27 Nov 2002 Published: Thu 28 Nov 2002 10:07:18
    Document No: 228570 Document part: B
    Market Flag: N
    Classification: Results of Meeting , Chairman's Address to Shareholders

    HOMEX - Perth


    I welcome all shareholders to today's annual general meeting. Before
    proceeding to the formalities of the meeting I would like to update
    you on Lumacom's progress and growth both over the last twelve months
    and our strategy and prospects for the future.

    The results for the past financial year have indeed been
    disappointing. It is with regret that the Company's strategy to
    develop the local Australian market and South East Asia as the
    springboard to promote into the much larger international markets has
    been well short of expectations. These markets are not as mature as
    we had anticipated with economic conditions, regulatory set-backs and
    advertiser repression holding back the market for Lumacom products.
    We feel these markets will develop in time but until then, they have
    been put on "pause". They will, of course, be monitored continually
    with the view that when they ARE mature, we will be fully prepared to
    advantage ourselves.

    The Company's technology and products have distinct and unique
    advantages but unfortunately its target towards the Australian
    outdoor advertising and rooftop signage market has drawn poor
    results. This has been mainly attributable to the fact that legislative regulations applicable to rooftop and outdoor signage in the Eastern States have tightened to Lumacom's detriment. This, combined with an ailing outdoor advertising industry, has lead to the disappointment. The downturn in the outdoor sector is clearly evidenced by the major outdoor advertising groups, particularly companies such as the Channel 10-owned Eye-Corp which have posted losses through a drop in outdoor spend. Our commercialisation in the
    local market has not been without the cooperation and assistance from third party expertise in the industry and I believe that it is fair to sum up that the massive scale down in outdoor spend has had the most dramatic effect on the successful marketing of Lumacom's

    The board of Lumacom took heed of this downturn during the end of the 2001 calendar year and as quickly as practical began research and commenced the implementation of a focused marketing strategy for
    Lumacom products into the North American and European markets. It is within these regions that Lumacom is now primarily focused. As part
    of our entry into these markets we identified, in contrast to our previous approach of selling product outright and promoting technology licensing arrangements with third parties, that a very
    lucrative market existed for Lumacom to enter in to joint venture and co-operative arrangements with major outdoor advertising companies and building owners. The European and North American outdoor advertising markets have been experiencing positive growth and are
    continuing to show signs of further expansion than that experienced in Australia and South East Asia.

    As part of our entry strategy, the Company appointed external marketing consultants: one of our consultants, Mr Simon Martin, who has been spearheading our efforts into the European market, is here today and kindly avails himself to discuss any issues involving that market at the end of this meeting.

    Even though (in terms of measuring sales revenue) it may appear that little has happened over the last year, I can assure you much progress has been achieved in North American and Europe since the beginning of this calender year. Although we will not be making any
    formal announcements today, I can say that the company is in advanced negotiations with major outdoor advertising groups with the USA, and in Europe with the largest outdoor advertising network centralised in
    London. This outdoor group has a reach covering 13 countries throughout Europe. The cooperative arrangements being finalized are, in fact, already subject to heads of agreement and involve the joint
    venture cooperation of Lumacom providing its signs on currently owned high profile sites forming part of the network controlled by these outdoor advertising groups. Lumacom will share advertising revenue with the outdoor advertising group (and / or building owners as the case may be) providing an extremely lucrative revenue stream over terms of typically; 4 and 5 years duration. Under the heads of agreement entered into, Lumacom has already secured two highly strategic and iconic sights. One of which represents, without doubt,
    one of the top ten sights on a worldwide basis. Both of these sights enjoy an audience in excess of 80 million people per annum. I should point out that these sights secured are still subject to the contracting of major advertisers and for this reason have not yet been announced. However, and importantly, we are in advanced negotiations with major global brand type international advertisers for 4 and 5 yr advertising contracts. The level of revenues being negotiated are substantial and represent excellent returns. In some
    cases providing a pay-back on sign supply and installation investment within 12 months, and beyond..... a lucrative source of on-going
    revenue. The funding of these signs will be via banking finance on
    the strength of the advertising contracts.

    As I mentioned, we are not in a position to make a formal announcement on these deals until such time as advertisers are contracted, but I can assure you, negotiations with such advertisers are at an advanced stage and we hope to be in a position to announce
    these positive outcomes fairly shortly.

    This joint venture cooperative arrangement and sharing of advertising revenue is being embraced by the market leaders in the regions by virtue of the low cost benefits associated with Lumacom's products.
    Our low cost capital base enables us to negotiate 50/50 revenue splits, as is the intention throughout Europe. It must be pointed out that conventional technologies and competitive products are unable to match these types of commercial arrangements because of their much
    higher capital costs.

    It is for this reason we believe we have struck a successful formula. One which will provide much greater profits in the long-term, given that it provides an on going revenue stream; in contrast to the approach of one-off sales. I apologise again, that given the tender
    stage of negotiations at which we are at with various parties we are unable to disclose more specific information. However, I can say that through the European cooperative we are negotiating a number of
    strategic sights throughout Europe, including one potential client that could see the installation of some 20 Lumacom screens over the next 5 years. We are very hopeful, and indeed feeling quite confident, that we are on the right formula and track for the
    successful commercialisation of the Lumacom technologies and products on the international stage.

    Although our focus is very strong in the North American and European market, any and all opportunities in Australia and Asia will continue to be serviced as they present themselves.

    In relation to our efforts in the Asian market place, our efforts have by no means been wasted. As a consequence of these operations,
    we announced today the signing of a strategically important manufacturing agreement. This not inconsequential announcement was
    made today outlining the finalisation of a manufacturing alliance
    between Lumacom and industry heavyweight; Opto Tech in Taiwan. Opto
    Tech is a manufacturer of LED based products and is a significant supplier of LED based video screens world-wide, having supplied some 400 video screens totaling 20,000 sqm of display since its entry into the LED business in 1990, Last year, their turn-over was in excess of $AUD 350 million.

    The strategic alliance between Lumacom and Opto Tech provides for "strength in partnering" through manufacture, supply, installation, support and maintenance of the wide range of psycho-physics based
    products. With Opto Tech's vast resources, including some 90,000 square metres of factory, employing 130 people and having secured industry applicable ISO standards, the association brings not only their experience and support but also considerable industry
    credibility in our quest for commercialization on the international stage.

    In an operational sense Lumacom is committed to driving the business on an efficient cost basis, being mindful of its cash burn rate.
    Administrative and everyday operational overheads are contained where possible. Our biggest investment is in the area of marketing. Even in this area, however, normally the high cost of salaries are controlled
    by the adoption of modest retainers with incentive commissions on sales and advertising revenue contracts achieved.

    On the formal part of today's meeting we will be asking you to ratify the issue of options to Mr Tim Ingram. To help you understand this, Mr Ingram is a third party consultant who has, and continues to assist us in corporate and marketing matters. Mr Ingram is not paid
    a consultancy fee but is retained under an option issue incentive. We do cover out of pocket expenses associated with travel where applicable and approved by the management team. The options are exercisable at prices substantially above the current share price. Mr
    Ingram is proving to be a valuable asset to the group and we recommend that you support this resolution which will also refresh our ability to issue securities under the ASX 15% rule.

    The third item on the formal business today, is to seek the approval of issue of shares. This resolution provides the opportunity to raise additional cash in supporting the Company's on-going operations. Even though we hope to announce positive news in relation to potential contracts currently being negotiated overseas, the board feels it prudent to maintain comfortable and satisfactory cash reserves and liquidity.

    To all shareholders, I trust my brief today has provided you with a summary of our progress and our future development which I see as being very bright and lucrative for the Company. We have indeed had a tough year, however, I reiterate my belief that the efforts exerted proactively in the North American and European Markets are at a stage where we hope to see successful fruition in the coming months.

    Lumacom's technology is innovative and patented worldwide. To change traditional approaches in global thinking for signage solutions to communicate advertising messages has simply taken time and effort. I
    speak on behalf of our executive managers, staff and consultants, who all firmly believe and are totally committed to the success of our mission. Ladies and gentlemen, we have done the hard yards and now we
    have reached a new level of understanding. We have entered an exciting period for Lumacom and we hope you TOO, will continue to support us.
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