from the west

PERTH company Lumacom yesterday confirmed it was on the verge of a deal to mount the world's biggest video billboards 50 storeys above New York's Times Square.

Lumacom said it stood to make up to $47 million over seven years on the deal, which will see 300sqm video billboards, designed in Perth, posted on all four sides of the Four Times Square building on Broadway.

Lumacom's US joint venture partner Totius Media has come to an agreement with New York property tycoon Douglas Durst to lease the roof space for about $1 million a year for each sign.

Lumacom managing director Rodd Sala said Four Times Square was the only skyline site approved by the City of New York for electronic signs of this kind and would put the company in front of the eyes of the world.

Carrying stationary advertising during the day and video advertising at night, the billboards will be visible from New Jersey to Long Island and the Statue of Liberty.

Mr Sala said the company was in advanced negotiations on a seven-year advertising deal with a blue-chip company for the northern facing board, which was expected to be mounted by November.

"Famous Times Square signs, like the Nasdaq sign, are virtually at street level, whereas this is going to dominate the skyline, making it the creme de la creme of sites in New York," Mr Sala said.

"We are in discussions with many premier US companies for the other signs and we expect them to be in place by the end of the year."

Under the joint venture arrangement, Lumacom and Totius will split the $6 million cost of building and installing the billboards and share the advertising revenue.

Paterson Ord Minnett analyst Robert Gee said the signs did not appear to be as lucrative as Lumacom's recently built Barcelona sign but would still be a good money spinner and boost its US profile.

"If they get 10 to 20 of these billboards signed up they will do very well," Mr Gee said.

A recent exercise of options raised $5.5 million, taking Lumacom's cash on hand to $6.5 million and boosting shares on issue to 100 million, meaning that every $1 million earned will contribute 1¢ to earnings per share.

The Sala family, who developed the LED technology that enables the screens to be made at a comparatively low cost, are Lumacom's dominant shareholders with a 22 per cent stake.

Mr Sala said the company was also in final negotiations for another 300sqm billboard in New York and in discussions for many more across the US and Europe that would form a multinational network.

"We expect that the commitment being made to our product by the Durst Corporation and advertisers will expedite our negotiations with other parties," Mr Sala said.

Lumacom's first European screen was switched on in Barcelona on May 16 and will earn about $800,000 a year.



lumettes need to be patient. i am sure that we all want the deals to be confirmed NOW, but the truth is, is that these deals involve advertising deals worth millions and millions of dollars, and cannot be made on the spur of the moment. if the time frame is achieved, - ie by the end of the year - then that would be good. i am sure that once the signs are up and running, then they will be a good demonstration point, and other deals may be done a bit quicker - just my guess