age article today

Making millions when the chips are down
By Ian Porter
November 2, 2005


HOW could a wife resist? "Look darl, this is a good opportunity. We could lose $5 million or we could make hundreds of millions."

That's how Mark Pallister sold his latest project to his most important stakeholder. The answer was yes and he went to work.

It was September 2004 when he bought the poorly-performed QuikTrak Networks from the administrator, who had been managing it for several months.

A year later, it looks like the positive alternative he painted for his wife is the likely outcome.

QuikTrak operates a security and monitoring service for valuable assets, most often expensive cars, using its own transmission network much like a phone company. Base stations scattered around a city monitor transponders attached to specific assets. The company sells the transponders and charges customers an annual monitoring fee.

In the middle of September, and only weeks after rejoining the ASX lists, QuikTrak reported it had won a contract to provide hardware and monitoring services for the Chinese Government in Beijing, worth about $380 million over five years.

This single contract dwarfed the $46 million in revenue the company had generated in the previous 10 years. Mr Pallister said it was a crucial win because Beijing would set the standard for the rest of China. "The potential in China is only limited by our ability to build networks and operate them," he said. QuikTrak has also recently signed a contract for a network in Lebanon and Mr Pallister has been making the rounds in eastern Europe.

In those first 10 years to 2003, QuikTrak had sold about 15,000 transponders in Australia. The China contract will involve 3.5 million and the first 100,000 will be delivered by early next year.

The China success flowed from an intensive research and development program instituted after Mr Pallister took control. QuikTrak had ground to a halt in 2003 because its first transponders had been based on computer chip sets designed for pagers. When pagers died out, there were no chip sets available and QuikTrak was unable to sign up new customers. It struggled to come up with an alternative technology and went into administration.

"We pumped in $4.5 million, revamped their research and development and set out to design a modem that would operate on anything: cars, boats, houses, plant and equipment. It's much smaller than the original transponder and costs much less to make."

While other security systems use telephony to alert a central monitoring office, Mr Pallister said the QuikTrak system's use of what is called spread spectrum technology — where the transponder can switch from one frequency to another and still get its data through — gives it the advantage.

"You can't jam it, you can't interfere with it like you can with a regular system based on a mobile phone SIM card."

In Australia, Mr Pallister is talking to insurance companies and two major banks about the system.

The reporter owns shares in QuikTrak.