drbrooks

Morning drbrooks, hi all,

Re.

“Page 10 from the half year report shows that the South Africans didn't like it. Revenue $0 (prev half yr $346k). That was about 25% of their total revenue for the half yr. They didn't say anything about it however.....

Wonder what happened?”

I had a conversation with Paul Gillespie late last week. Amongst many questions – I got an answer for the above.

First up, let me say that the response to my request for information was very well done. I couldn’t get through by phone in Aust. And sent an email (which was suggested on the site). I got a response immediately saying that the recipient was busy travelling and would get back to me on the 24th.

My message (which was sent to NZ I guess) was passed to Australia and I received a call as indicated on the morning of the 24th.

I was spoken to and informed respectfully and as fully as possible as far as I can see. No questions were avoided and the entire conversation was handled imo and my partners opinion, very professionally. Both of us think Paul is very personable AND professional and has the goods to take this company quite a way.
It is one thing to have a friendly MD, it is another to a have one who has the thinking and ability to make a company work.


That will do me thanks, very happy with that at this stage.

Now to the South Africa business.

That income was a one off technology sale to a customer who likes Smart parking technology. South Africa is not viewed as a market which is or will be actively pursued at present or on the radar as far as I know in the future. It is not a market that the business is targeting specifically, hence, no sales effort is planned other than serving customers that contact us and looking after existing customers.
There may be some income that comes from the area, however, that will be a result of the SA contact that likes SPZ products.

The telephone conversation was quite long and fruitful for my partner and I – and I have to say that we would alter our strategy with this company on the strength of it. Our initial strategy was medium term.

On the basis of what was said and confirmed – we would be more than happy to have a long hold position now ------- of course it would have to be flexible depending on how the company changes as it grows and personnel change.

In short what we found is that although the company still struggles with the car park management side in Britain, things are changing on that side of the business. However, the technological side is really looking solid and hopeful.

Again, slow sales process because of councils/budgets/sales cycles etc. ----------- just like NEA.

Sales may fall into place much quicker than expected though as noted before – councils and govt. just can’t stand to be left behind and SPZ has visibility in London now and much more soon. Councils generally go like dominos – certainly in Australia and it seems the same in England.

The real revenue stream (high profit) is in the period post technology sales with the data ---------- I alluded to this in an earlier post.

Paul says, and we have no reason to doubt what he says, that he will choose new sales staff carefully and not rush into just having sales staff for the sake of having them --------------------- that was certainly an early disaster that held NEA back in early days.

Depending on how good the new staff are at networking and if they have solid contacts already – you still have the dreaded sales cycle of local govt.. He already has a great sales person in England and has history with them and they are very successful and have delivered for us already.

Gov. sales can be done fairly quickly, but it can be a long toothpulling exercise as well. What it does mean is that if you are in the budget and the ‘neighbours’ have a system and everything is hunky dory – then you can be pretty sure that pipeline sales will come off – when is the question. (this opinion is mainly my partners and I drawn from experience, this conversation and watching NEA closely).

In the end for us, imo SPZ is about to move ------------ how much and over how long I don’t know ---------- however, unless the wheels fall off I think it has a very very very strong 2 or 3 years ahead of it..


Medium term – ie. from say a month to 6 -------- I think it is highly likely the sp will be strongly supported possibly move toward 35 or better --------- but, in the next early years -------- I think it may well be a top asx performer.

Of course, the wheels have to stay attached ------------ but, from what we hear ------------- all good, good people, fantastic backing – gees, how much better does anyone want – Chris Morris and Penelope Maclagan – both prepared to back the company – and certainly Chris, by his history just won’t let go if he thinks it’s good. And from the conversation --- they both think this is a very very good thing.

It is very good to have a deep pocket backer if you need it. Apparently they do not want to dilute unnecessarily and require very good reason to raise – they must be convinced of benefit.

But, how good is it to have people like that on board if one ‘did’ need money to grow and the market was tepid --------- that is one hell of an ace up the sleeve.

The strong impression I got about Chris and Penelope is they see this as being big -------------- and ‘big’ in their terms is a tad different to ‘big’ in most of our definitions ie. when Chris thinks big – he thinks BIG>

So, if anyone has any questions, I may have asked them – sfeel free and I will expand if I can.

Have a great day and a great week.

Pinto