Skip to content

PRO`s Ann:CEO`s Address to AGM/Results of Meeting

Document date:  Tue 24 Oct 2000
Published:  Tue 24 Oct 2000 15:43:02
Document No:  126997
Document part:  A
Market Flag:  N
Classification:  Results of Meeting , Chairman's Address - Other


HOMEX - Adelaide                                                      


Welcome to the third Annual General Meeting of Prophecy International
Holdings Limited. I am pleased once again to be able to address this
meeting and report on the activity of the company for the past year.

The Prophecy business entered its twentieth year of trading this year
and we are all very proud of our long history of software development
and the support of innovative enterprise wide business solutions
suitable for the global market. Our dedicated staff are committed to
the continuous enhancement and evolution of our unique products and
are determined to see them prosper in the corporate market space.

The year just completed has been one of consolidation for the Group.
The total number of shareholders has continued to increase and now
stands at over 1600. This I believe demonstrates market confidence in
our future. Towards the end of the last calendar year we considerably
strengthened our Balance Sheet position and placed 3 million shares
with Institutional shareholders to raise some 12 million dollars to
add to the working capital of the Group. As a result the Group is in
a very strong cash position and is able to invest in the further
enhancement of its technology and the expansion of its sales
activities world-wide.

The overall result for the year just completed came in two very much
contrasting halves. Our products are aimed at the large corporate and
government marketplace world-wide. As a result of Y2K fears buyers
in these markets to a large degree sat on their hands during the
course of the first half, resulting in a substantial slowdown in
orders for our products. We saw as a consequence a low revenue figure
and a sizeable loss for that first half. This was a disappointing
result. However, the second half saw a return to business as usual
after the world did not end on the 1st of January. We achieved a
record result for the second half with Revenues of 10.3 million
dollars and an after tax profit of 2.5 million dollars, beating the
previous best half being 7.5 million dollars in revenue. The slow
first half however saw the overall result for the year at 12.8
million in revenue and an after tax loss of 382 thousand. The result
would have been a profit for the year had the figures not included a
provision for doubtful debts.

Our balance sheet remains very strong with total assets at 21.6
million, total liabilities at 4 million and net assets at 17.6
million. This gives a net asset backing of 38.8 cents per share on
the expanded number of shares after the placement. As the vast
majority of our development of Intellectual Property has historically
been expensed, the considerable value of our intellectual property
does not appear on the balance sheet. On this basis we believe that
markets currently are undervaluing our Company. The record second
half result demonstrates the potential of our solutions and is the
pointer to the capabilities of our business in this financial year.

We have secured a number of important contracts that place a stamp of
approval on our unique e-Foundation Rapid Application Assembly
environment which combines our Framework software with core modules
ready to implement a tailored solution and deploy that solution via
the internet. A few examples include the Asset Finance division of
the ANZ Banking Group, the Colorado State Government and the internet
travel company Bye Bye Now. The ANZ for instance is utilising our
E-Foundation technology to develop a sophisticated tailored solution
to drive all aspects of their Asset Finance Division business.

The major benefits being derived by our clients are a saving in time
and money on the development of large business solutions and the
flexibility in being able to rapidly adjust those solutions as the
market demands over their life. The ANZ deal is one of the largest
that we have concluded and will earn considerable revenues for the
Company over the life of the solution as well as provide an excellent
reference for the capabilities of our unique e-Foundation offering.

Our future lies in providing large scale tailored e-Business
solutions such as this to large corporates and government departments
around the world. We utilise the latest in object-oriented Java
technology to further develop our solutions, keeping them unique in
their ability to provide modern systems for business competitiveness.
We have invested in our own expanded salesforce to take our
e-Foundation solutions to markets in all of our territories.
Additionally we continue to focus sales activity on partnerships
across the world to provide exponential growth potential through the
leverage of the sales and marketing operations of large partners. We
see this as strategically very important. On the back of recent large
e-Foundation deals we are taking the opportunity to expand our
consulting revenues. New staff have been added in recent months to
grow our consulting team and the scope for expansion of revenues in
this area is large indeed.

To contribute to our future success we at Prophecy are committed to
supporting the development and wellbeing of all of our staff
throughout our global operations. Over the last 12 months we have
actively recruited staff within the areas of development, support,
sales and marketing such that our dedicated global team of 90 staff
gives us the capacity to reach our corporate objectives. I would
like to thank all the staff of Prophecy as their efforts do make the

In conclusion, I would like to thank you the shareholders for your
continuing support of the Company and look forward to seeing you
again at next year's meeting.