HARVESTROAD LIMITED 2003-04-30 ASX-SIGNAL-G
HOMEX - Perth
+++++++++++++++++++++++++
OVERVIEW
In the March quarter HarvestRoad Ltd ("Company") successfully
transitioned from a software development mode to commercialisation
mode.
The Company continues to implement a stringent cost management
programme however the results for this quarter fundamentally
demonstrates improvement to the Company's revenue base.
Having an internationally recognised product released and generally
available for sale in February generating sales almost immediately
as a result - is a positive story for the Company this quarter.
SALES AND MARKETING ACTIVITY
In February 2003, the Company officially launched its flagship
product HarvestRoad Learning Content Management System (LCMS) 2.0,
also know as HarvestRoad "Hive", at the BlackBoard Users Group
Conference in Baltimore, USA.
The Company's key reference accounts; Open Learning Australia, the
Northern Territory Department of Education and the Australian
Department of Defence have deployed the new release capability in the
quarter.
HarvestRoad LCMS orders were received from Griffith University in
Queensland, Erasmus University, Delft University, Waginengen
Agricultural University in the Netherlands and the company expects to
acquire six new higher education accounts across the United States,
United Kingdom and Singapore in the fourth quarter. Almost all new
sales are based on a software-leasing model and therefore create
recurring annual income streams.
The Company is also undertaking significant business development
activity in the Federal Schools Online Curriculum Management market
with two foreign Ministries of Education an area in which the
HarvestRoad LCMS excels. The year one value of these sales is
estimated to total around $2 million with a whole of life value of at
least $5 million. Sales into pilot projects expected in the next four
months represent sales valued at approximately $300,000.
During the quarter the Company became a software development partner
of IBM Inc to facilitate the integration of the HarvestRoad LCMS to
IBM's newly launched Learning Management System. The Company and IBM
are researching the Defence and corporate market potential with this
joint capability.
The Company has also appointed new agents in Singapore and the United
Kingdom to help expand its marketing services and has become a member
of the WebCT Learning Innovations Network.
As part of the Company's recognised market leadership and ongoing
initiatives it is in discussions to enter into an exclusive Master
Distributor Agreement for a UK developed industry standards
compliant, content authoring application. This tool will be
integrated with the HarvestRoad LCMS to enable the creation of web
based (HTML) content via Microsoft Word without the need for
specialised authoring skills. The integration with HarvestRoad LCMS
will enable content to be published directly into the HarvestRoad
LCMS for storage; verification and version control and delivered to
the client's chosen course management systems. Building on the
Company's successful partnerships with leading course management
systems, the integration with authoring solutions will provide its
clients with a comprehensive solution for their content development,
management and delivery needs, whilst further enhancing the Company's
value proposition and market competitiveness. This has been well
received by the Company's lead clients and it is expected the product
will create a viable, new, recurring income stream for the Company.
FINANCIAL OVERVIEW
The Company is pleased to announce that Receipts for the month
increased from $227,000 (Q2) to $419,000 (Q3) with Net Cash Operating
Outflows continuing to decrease from $373,000 (Q2) to $50,000 (Q3).
Total Operating and investing (R&D) outflows decreased from $752,000
(Q2) to $359,000 in the March quarter.
For the June quarter, the Company is targeting $750,000 in sales
receipts of which $521,000 in sales commitments and receipts has
already been received in April. Importantly, the Company is
anticipating a breakeven cash flow for the June quarter, based upon
the receipt of targeted sales receipts and operating expenses of
$750,000 for the quarter.
Assuming authorisation is received for contracts entered into, or
expected to be entered into in the next two months - and systems are
subsequently installed the Company expects to receive an additional
$1.1 million in receipts for the September 2003 and December 2003
quarters.
As set out in the Company's announcement to ASX on 15 April 2003 the
Company has lodged a Prospectus for a non-renounceable rights issue
to Eligible Shareholders of up to 10,650,000 New Shares on the basis
of 1 New Share for every 5 Shares held at an issue price of eight
cents ($0.08) per New Share to raise approximately $850,000 (before
expenses).
Cash at Bank as at 31 March 2003 is $758,000. Combining the sales
commitments and income receipts to date of $521,000 with the maximum
capital raising funds of $850,000 (before expenses) will provide the
Company with cash inflows of $1,321,000 in the June quarter, the
Company is anticipating a Cash at Bank balance at 30 June 2003 of
approximately $1.3 million (subject to the capital raising being
fully subscribed).
SUMMARY
The Company has successfully transitioned from a software development
mode to commercialisation of its HarvestRoad LCMS product with a
global launch in Baltimore, Maryland and sales in Singapore,
Australia, United Kingdom, Belgium, Holland, the United States and
with more countries expected to follow.
The Company has established a technology leadership position in the
Higher Education market and believes it is an outright prime mover in
the Federal Schools Online Curriculum Management Market as evidenced
by meeting the needs of Ministries of Education around the world.
The Company's association with IBM is very exciting and the Company
expects major sales announcements this quarter.
Finally, the identification of a new software partner to integrate
HarvestRoad LCMS with simple learning content authoring tool is an
important technology and revenue initiative and will enhance the
value of the HarvestRoad LCMS to the education market, and
demonstrate the Company's ability to work with third party
developers, as well as a maturing of the Company's business model.
On behalf of the Board I look forward to continuing to drive the
business forward and to provide a long sought after return to
shareholders.
G Barty
EXECUTIVE CHAIRMAN
- Forums
- ASX - By Stock
- HRD
- heads up an impressive turn around
HRD
harvestroad limited