for the final time...., page-59

re: for the final time Let take a good look at LUM:

Sala had in various pronouncements to Shareholders intimated that were up to 50 potential sites that the Company was looking at. The impression which the company sought to convey was that these deals were signed up and advertisers were chomping at the bit to part with their dollars.

The reality is that there are only two signs (excluding the one in Perth I think) that have progressed to any revenue earning stage. Barcelona being one and the other in Moscow. Lumacom has stated in a recent announcement that revenue from this sign was not as forthcoming as hoped. Indeed Sala had to spend some time recently there trying to shore up this revenue base. The Moscow sign was sold to Pepsi and the moneys for this should start to appear in the next set of accounts.

It was announced with great flurry that Athens was very interested in a sign. A deposit for that sign had been paid. Great expectations of moneys especially given that the Olympics will be held there in August this year. What is the truth? The truth is that local government has intervened in an attempt to clean up the city from unwanted signs, presumably to impress all those going there for the Olympics. There is no prospect of that sign being installed for the Olympics. I don’t think there will be a sign ever constructed in Athens despite a deposit being paid. That deposit will be forfeited. The Greek economy is not in the greatest of health even with the Olympics looming.


Once again Istanbul has been touted as another great site. Once again lots of announcements but since then silence. Yes Lumacom partner is a well known developer etc in Turkey and elsewhere but one can only presume that the sign has sunk in the quagmire of local government planning and so on and so on.


The much hailed Times Square project has been going on for so long that if it takes any longer it may ready in the year 3004. Lumacom has hit a skyscraper here. This where the management of Lumacom has shown its failure. It keeps on claiming that things are ready to roll but what is the excuse here? It can’t be local government as it claims that it has jumped this hurdle. We have been pointed to various internet sites which have pictures of the building with cranes all trying to give the impression that once advertisers sign on that dotted line the sign will be constructed and dollars will be coming in. It is obvious the owners (Durst) want the signs to be constructed. It is estimated that Durst will earn US$1 million from each of the signs. One can conclude that that Lumacom and its partners Totius would be earning considerably more than that. Some have claimed figures in excess of US$4 million per sign. So where is the problem? The problem is in either one and/or two places. The first being a lack of advertisers willing to sign up at the prices being asked by Lumacom and its partners. The second being there are problems in the relationship between Totius and Lumacom. Could be this be the reason why Sala has spent so much time in New York trying to sort things out? I believe that the first to be more correct than the second. If there were serious advertisers (and one would have thought Pepsi would have been the frontrunner given that they had bought the Moscow sign) there would have been contracts of intent already signed by now. The A list advertisers in my opinion are not interested and the B list seem to be reluctant. If the advertisers were there the market would have been told by now. It is also quite possible that there are differences of opinion between Lumacom and Totius. It should be also noted that Totius is a shareholder in Lumacom. I can’t tell you how many shares it holds.


Before the sign in Hog Kong can be installed there are so many hurdles which have to be cleared before that happens. Yes if it does go ahead then China does look like providing great opportunities fro Lumacom. But once again I believe that there are no advertisers signed up. The Hong Kong Deal is just that an agreement of intent with a holding deposit paid.


One can go and nit pick one’s way through the various announcements and find points of conflict but I think I have given enough examples already.


The current share price is a reflection of the markets disappointment in the way the company has been run. Yes it easy for the company to bask in glory when the price went to $0.90’s on the basis of limited information and perhaps announcements which were just wishful thinking and then blame the market for the current situation. Yes Sala has asked for patience. However the market is becoming increasingly impatient as nothing appears to be happening. Sala has now been away for almost 4 weeks but Times Square hasn’t been sorted nor has anything else. The longer the company buries its head in the sand the worse the share price will be. It is time for some comments even if those comments may lead the share price down. An informed market is better than one which uninformed.


Finally Lumacom has to come with various contracts shortly as it despite the half yearly report indicating that there were significant funds in its accounts and that Moscow sale was not yet included for various accounting reasons, the company is spending lots of money without significant incoming revenue. Much of the money in the accounts was from moneys raised form an option issue.


I hope that I very much wrong for those who are shareholders in Lumacom and that the share price will rise. I think Lumacom has great potential, but is being let down by a management which not capable of its task to take Lumacom ahead.