PRO`s Ann:CEO`s Address to AGM/Results of Meeting
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
PROPHECY INTERNATIONAL HOLDINGS LIMITED 2000-10-24 ASX-SIGNAL-G HOMEX - Adelaide +++++++++++++++++++++++++ CEO'S ADDRESS 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 difference. 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.