ferrets stock to watch: optima corporation lt

Ferret's Stock to Watch: OPTIMA CORPORATION LTD
07:54, Tuesday, 6 February 2007

LOCAL COMPANY GIVES SURFING AWAY TO JOIN THE SCOOTER BRIGADE

Sydney - Tuesday - February 6: (RWE Aust Business News)
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OVERVIEW
********

Optima Corporation Ltd (ASX:OPC) has finalised the disposal of
its wholly owned subsidiary, West Surfing Products (USA) Inc.

The sale follows a strategic review of the US-based surf
business and subsequent decision by Optima to devote its time, effort
and resources to the international growth of Vmoto and the immediate
opportunities presented by the newly acquired Freedomotor Company Ltd.

Under the agreement, Optima will transfer the licence back to
West Surfing Products Australia Pty Ltd, by way of disposal of the
loss-making West Surfing USA vehicle in a share sale transaction.

The disposal was effective from December 1, and under the terms
of sale, will result in Optima receiving $US240,000 between now
and June 30 2008, together with cash and accounts receivable as at
November 30.

Therefore, total proceeds expected are estimated at $US350,000.

A decision to switch its mainstream business focus from surfwear
sales in the US to scooter sales and distribution throughout Australasia
has proven correct for the company, according to directors.

The company announced that consolidated revenue contributions
from scooter sales and distribution activity in the opening month of
2007, amounting to a healthy $3.9 million, exceeded Optima's total group
revenue stream for the six months to December 31 last.

Optima acquired Vmoto Motorcycles on June 30, which was followed
by the acquisition on January 1 of 100 per cent of Shanghai-based
Freedomotor Company Limited, an international scooter/motorcycle trading
and distribution group which is expected to contribute over $50 million
in revenue for the year ended June 30, 2008.

Those proceeds are in addition to the expected revenue from
Optima's maiden move into the scooter business a few months earlier,
resulting from the global acquisition of the class-leading Vmoto scooter
brand.

Vmoto scooters are distributed throughout Australia, New
Zealand, the United States and more recently, the UAE.

"The 2007 opening four-week scooter-based revenue performance is
a significant uplift in the fortunes of the company," Optima's managing
director, Blair Sergeant, said yesterday.

"Projected forward, the revenue trend signals the establishment
of a much more robust, higher cash flow and profitable cornerstone
business operating within higher demand market geographics.

"While it is still early days, the dramatic rise in demand for
cheaper and more lifestyle orientated transport, combined with the
current intense debate about vehicle emissions, climate change and
pollution, strongly favours the medium to long-term outlook for higher
and sustained scooter sales," Mr Sergeant said.

Importantly, Mr Sergeant said, both the Freedomotor and Vmoto
businesses were profitable in January, with the total January scooter
sales and distribution performance some 30 per cent ahead of budget.

SHARE PRICE MOVEMENTS
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Shares of Optima yesterday gained 21c to 15.5c. The rolling high
for the year is 16.5c and low 6.2c. All-time high is 39c. The company
has 183.3 million shares on issue with a market cap of $28.4 million.

In early January Optima disclosed it had successfully completed
the acquisition of Freedomotor Company Limited with payment of the first
tranche of $US1 million to the vendor of Freedomotor having been made on
January 5.

Executive director Patrick Davin said the completion of this
transaction ensures that the growth of Vmoto throughout the world can be
greatly accelerated, with talks already scheduled with some overseas
groups as a result of this acquisition.

"The next 12 to 18 months for Optima and VMoto is going to be
very exciting to say the least," he said.

The payment ensures that the company acquires 100 per cent of
Freedomotor effective from January 1, enabling Optima to rapidly expand
Australia's largest scooter brand, Vmoto, to over 50 countries
throughout the world.

Directors also announced that the current Freedomotor managing
director, Charles Chen, has joined the board.

Mr Chen will be based in the Shanghai office, with a team of
four managers and 17 staff.

From 1993 to 2002, Mr Chen held senior executive roles with
Hainan Sundiro Motorcycle Company Ltd, the largest publicly listed
industrial company in China's Hainan Province.

Hainan Sundiro was acquired by Honda Japan in 2001.

BACKGROUND
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Optima Corporation Ltd joined the Australian Stock Exchange list
in January 2002.

It is a branded consumer products company, with an expanding
portfolio of leading brands in the action sports, leisure and lifestyle
market segments.

The company's expertise is in brand development, management and
strategy.

The Optima philosophy is achieved through effective licensing,
marketing and distribution strategies, geared at leveraging maximum
potential brand equity.

The Optima portfolio consists of proprietary brands with a
global distribution scope and exclusive licensed brands in specific
territories.

Its current portfolio consists of Vmoto Motorcycles globally and
West Surfing products and Creatures of Leisure under exclusive licence
in North America.

ENDS

Copyright © 2007 RWE Australian Business News. All rights reserved.