EMM 0.00% 0.7¢ electrometals technologies limited

very good future from low base

  1. 549 Posts.
    Have just finished reading the Directors report and it has all the ingredients to flag a rapid rise in share activity in the next half for this company. Looking beyond the figures, which are dismal, is the true story of a small Aussie company's struggle to succeed finally reaching fruitition.

    After seven years developing their award winning Electro winning cell design, EMM have been joined by DeNora, the world's largest anode manufacturer. Using their network of sales and manufacturing facilities, EMM are set to produce a bumper year, which could be just the cusp of even larger sales.

    They are debt free, have substantial money in the bank to finance future plans, a stable work force, a proven product and now the right connections to market that product world-wide. I recommend reading the report in full, which can be found on the ASX website. Here are snippets:

    "We are now working very closely with DeNora to secure maximum benefits from this relationship. Mr. Renato Gazzaniga, the Managing Director and CEO of DeNora, has joined our Board of Directors to ensure that the synergies between the two companies are fully exploited, not just within the terms of the principal agreements. An example of this can be seen already in our arrangements for the assembly by the Denora factory located in Brazil of a large EMEW ® plant destined for a customer in that country, thereby achieving significant cost and commercial benefits. DeNora also has manufacturing plants in India, China, USA and Europe, and our ability to make use of them will enable us to expand more rapidly without taking on additional overheads and without compromising our gross margins. Additional growth and profitability should result from our DeNora arrangements."

    From another part of the report:
    ........."However, we continue to believe that we will secure orders in this calendar year for at least $10 million of new EMEW ® plants, and that we will be able to convert most of those orders into revenue by year end. Here is how we intend to do that:
    1. One of our largest expected orders is for a customer in Brazil. As explained above we plan to have some components and assemblies of this plant built in DeNora’s Brazilian facilities. This will not only enable us to build the new Brazilian EMEW ® plant quickly, but it will also leave our Australian manufacturing capacity available for other work. We expect to be able to record at least $8.0 million of revenue from this order in 2003, if the order is confirmed by early October.
    2. We have 4 other projects pending worth $2.0 million which we expect to confirm within the next two months. We are sufficiently confident of these future orders that we have already manufactured most of the standard modules required to fulfill $1.0 million worth of them (as at 25 August 2003), and are holding them in stock. This means we can deliver them very quickly.
    3. We have 3 other projects pending worth $2.2 million which we expect to confirm within the next 6 months. Some of these projects may also enter production before the end of 2003, although their timing is less certain than those mentioned above.
    4. We have progressively improved and expanded our manufacturing facilities and employee numbers to improve capacity and efficiency. The production of units for inventory has not only been useful in this exercise, but has also enabled us to minimise loss due to idle capacity and to ensure continuity of employment for our good people.

 
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