MAKING IMPORTANT ALLIANCES FOR BIG REVENUE FLOW IN 2006 (RWE Aust
Business News)
Since last September ConnXion Ltd (CXN), a leading provider of document
production and multi-channel delivery solutions, has been making
important alliances with a number of technology companies that
complement its basic objective of low cost multi-channel deliveries
through its own technology or those of others.
2006 looks to be shaping up as a great year for revenue expansion.
Chief executive of ConnXion, David Colvin, points out that revenue from
these sources take between two and three months to materialise.
Giving a rundown on the company's latest deal with Singapore Post,
which will use ConnXion technology, a possible 10 per cent of the
business would give his company an annualised profit of $1 million.
On March 16, ConnXion reported it will provide its services to
Singapore Post, which entrenches its presence in the Asian market.
Singapore Post is one of the most efficient and profitable postal
operators, and under the Memorandum of Understanding it will operate
the hosted service for electronic email, fax and postal delivery of
business documents to its customers using ConnXion's technology.
The company's half-year result was encouraging but not overly exciting,
unless combined with a potential explosive growth pattern for 2006.
Revenue in the December half year was up 16.4 per cent to $471,959
while the net loss climbed by almost 84 per cent to $1.6 million.
Significant achievements for ConnXion Limited since the last report are
impressive:
Blue-chip Australian enterprises continue to sign up with ConnXion with
revenue growth now accelerating.
Latest new contracts include Coca-Cola Amatil (three-year term) and
Atlas Group (five-year term).
Telstra Multi-Channel Document Delivery service (powered by ConnXion)
has many large prospects in Australia and overseas with a number
expected to be contracted in the next few months.
Singapore Post signed a memorandum of understanding that will
contribute significant revenue and profitability for the company,
commencing immediately.
SHARE PRICE MOVEMENTS
Shares of ConnXion yesterday sold steady at 17.5c. The rolling high has
been 24c and low of 13c. The company has 92.4 million shares on issue,
of which 45.1 million are subject to escrow restrictions until Jan
2007, with a market cap of $16.2 million
CEO Colvin says, "Our partnering and international growth strategy is
now in place," and he now believes it is the foundation for significant
growth in 2006.
Revenues for the quarter ended March 2006 is expected to be up about 30
per cent on the previous quarter.
Accelerated growth rates are expected over subsequent quarters.
ConnXion typically signs multiple year contracts with its customers, or
through its partners.
Since June 2005, the number of contracted customers has grown from 14
to 25, while the expected annualised revenue from these contracts has
grown from less than $500,000 to over $1,500,000.
The planned growth of ConnXion has been based on gaining market
credibility through signing up local blue-chip customers direct with
ConnXion, followed by scaling the business internationally through
partners.
This second phase is now well in place with current partners, Telstra,
Singapore Post, EuroConnxion and Innovation Associates.
"We now expect revenue and profitable growth to accelerate during 2006,
with a break-even position being achieved before the end of this
calendar year," Mr Colvin said.
An update on important events, the company's activities and related
expectations is as follows:
Australian broadband use doubles: Broadband internet promises more
Australians access to their bills and statements electronically. The
good news is that in the 12 months to September 2005, broadband
adoption in Australia nearly doubled to almost 2.6 million connections.
This is a very positive trend, as consistent broadband growth gives
more bill-paying Australians the option of receiving, processing or
querying their accounts online, when and where it suits them.
This movement ultimately gives end users more choice and flexibility
and naturally, continues to open significant revenue streams for
ConnXion. BACKGROUND
ConnXion joined the Australian Stock Exchange list on January 13, 2005.
It is an innovative technology company and Australia's leading provider
of document production and delivery solutions.
The company delivers critical business documents (such as invoices,
statements, reminder letters, remittance advices and reports) to
partners' customers, shareholders, employees and suppliers across
multiple delivery channels including email, fax, SMS and the postal
system.
Products and services produce the highest quality business documents
and provide a seamless migration from paper to electronic delivery,
resulting in reduced document delivery cost, improved cashflow and
enhanced productivity.
ConnXion provides communication services to many of Australia's leading
blue-chip organisations.
Current customers include: Tab Limited, DHL Express (Australia, NZ and
Singapore), Pacific Brands, Rural Press, Schenker and Mulford
Plastics.
Based on a core set of open, standards-based technologies, the ConnXion
hosted service is powered by FLEXML (patent pending) technology.
ConnXion believes it is clearly leading in the digital document
revolution.
By partnering with its customers the company delivers compelling
solutions that address their business problems of today.
A dedicated project manager is appointed to every new client
implementation.
ConnXion has business partnerships with Australia's leading delivery
channels including several mail houses and electronic delivery
specialists.
The ConnXion hosted service is configured to dispatch documents via the
most appropriate delivery channel for each customer's needs.
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