ferrets stock to watch: harvestroad limited

Ferrets Stock to Watch: HARVESTROAD LIMITED
09:15, Monday, 18 September 2006

SMALL TECHNOLOGY STOCK ATTRACTS DOW LEADER IBM

Sydney - Monday - September 18: (RWE Aust Business News)
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OVERVIEW
********

At first glance you could be excused for passing over a small
company that has been struggling for many years and in the latest year
posted another deficit.

But the company must have something going for it if Dow
industrial International Business Machines likes the cut of its jib and
wants to stake in the company.

On Friday, technology company HarvestRoad Ltd (ASX:HRD)
disclosed it had completed a worldwide market teaming agreement with
IBM.

The Dow company will take an equity stake in HarvestRoad and the
two companies will establish a worldwide marketing and sales strategy
for the commercialisation of the HarvestRoad Hive application as an
integral part of the IBM Open Learning Framework.

HarvestRoad managing director Graeme Barty said both companies
will work through the IBM sales organisation to launch the Education
Solution to the worldwide client base.

"Together we will work to recruit and educate global business
partners and work closely with existing partners in the USA and Europe,"
he said.

Mr Barty noted that this approach is the first major step in the
newly focused strategic commercialisation phase of the company's
development.

"We aim to create these alliances, preferably cemented with
equity commitments, to gain access to organisations which exercise
control and influence over major world-scale market share in our key
application segments.

"This one represents our commitment to the worldwide education
market and our means of access.

"We intend to use this access model in other key markets, such
as publishing and notably defence/aerospace, an area in which we have
been building relationships and expertise for some years.

"For each business application area, as our products become
fully featured we will seek to embark upon a marketing and sales
alliance which will provide growing access to major international
customer bases," Mr Barty declared.

SHARE PRICE MOVEMENTS
*********************

Shares of HarvestRoad rose 3.5c to 19.5c on Friday. Rolling high
for the year has been 26c and low 10c. The company has 77.7 million
shares on issue with a market cap of $12.4 million.

Last week Harvest reported a net loss of $386,956 (including
$58,643 in foreign exchange losses) compared with a net loss of
$2,376,546 in 2005.

However, the results underline a solid recovery is on the way
which augurs well for 2007.

Revenue and other income increased by 89 per cent from
$3,387,306 in 2005 to $6,402,132 in 2006.

The company achieved a more even spread of sales across its
global territories and market sectors providing an excellent base for
continued growth on a diversified basis and therefore reducing the
reliance on any one client or activity for sustainability in operations.

During 2005/2006, HarvestRoad continued to successfully
deliver services to the Institute for Latin American Communication in
Education (ILCE), and established significant new sales in Britain and
Europe and its first sales in the lucrative North American market in the
defence and education sectors.

To meet the opportunities presenting themselves in these
markets, during the year, the company established a presence in France,
UK, Canada and the USA.

This allows the company to deliver globally to HarvestRoad's
partners and potential new markets for the company's Hive products
including significant participation in trade and standards events.

This increased marketing activity and the establishment of
development capability for the contract with BAE Systems announced late
last year and the appointment as an endorsed supplier by the US buying
consortium MiCTA announced in January this year, resulted in the company
investing additional but recoverable funds on those activities during
the period

Highlights include the continuation of services to the Mexican
based ILCE e-learning project which resulted in sales revenues of
$1,345,352 during the year and the award of the contract by BAE Systems
which is expected to result in around $2,200,000 in revenue over the
eighteen-month term of the contract.

Key financial points in the period included the following:

* The receipt of $1,859,369 from ILCE for services completed
during the year ending 30 June 2005.

* The company held cash on hand of $1,419,834 at year end
compared with $1,718,201 in 2005, and had no debt.

* The company held $463,734 in unearned revenues at year end
compared with $1,058,756 in 2005.

Unearned revenues are recognised over the period for which
services are contracted.

Investigations into the impact of Australian equivalents
International Financial Reporting Standards (AIFRS), which came into
effect from July 1, 2005, indicate a low level of impact on the
company's statement of financial position.

BACKGROUND
**********

HarvestRoad was established in 1996 and joined the Australian
Stock Exchange in September 1999.

It is a technology company based in Perth with branch offices
in Sydney, Melbourne, Canberra, Mexico City, Atlanta, Ottawa, London and
Lyon, and global partners in Europe, UK, USA, Latin America, and Asia.

The company has developed software for the eLearning and
eTraining markets in education, government, defence, and enterprise.

HarvestRoad Hive is a federated digital repository system.
Totally independent of, but interoperable with, the systems that create
and deliver content such as authoring tools and Learning Management
Systems, HarvestRoad Hive allows the reuse and sharing of learning
objects across single, multiple or geographically dispersed locations.

HarvestRoad Hive can be used to store any type of digital file
but it is particularly suited to the requirements of online or flexible
learning where content needs to be stored, accessed, assembled,
disassembled, shared and reused in multiple contexts and environments
and scale to millions of users.

This month HarvestRoad has been selected as a finalist in the
2006 WA Industry and Export Awards in the Information and Communications
Technology Export Award category.

The Information and Communications Technology Export Award
recognises outstanding export achievement in the field of information
and communications products, technology and services.

HarvestRoad develops a content management solution for the
eLearning and online training markets spanning education, government,
defence and mission critical industries.

ENDS