seems you called the tivo correctly. Engin will relinquish distribution exclusivity in an amended deal to reduce costs. Does not look good to me. Full report below.
Performance Update Half Year ended 31 December 2007 Sydney, 24 January 2008: Chairman Appointment Engin today announces that Mr Ian Smith has assumed the role of Chairman of the Board. Mr Smith, who joined the company in September 2007, brings a wealth of experience in the media and communications industry to the role, with over twenty years in the advertising business. Smith’s previous roles include CEO of Yahoo!7, CEO of the Communications Group Ltd, President International for Bates Worldwide and a board Director of Cordiant Communications PLC. Performance Update Engin Limited announces its unaudited draft financial statements for the half-year ended 31 December 2007 showing a net loss before and after tax of $6.7 million. As noted in the Chairman’s Statement in the 2007 annual report, during the second half of the 2007 financial year, the company commenced the implementation of a world-class customer relationship and billing system. This went live in the final quarter of last calendar year. Through this period the company’s high customer growth aspirations were unfortunately not met, despite achieving growth in subscriptions of 11.4% to 85,000. A strategic review of the business was undertaken in October and November 2007 to reduce the ongoing working capital requirements of the business, and bring forward cash flow breakeven. A revised strategy was determined and implemented which, to date, is succeeding with remuneration, marketing and services related costs having been significantly reduced and are now more closely aligned with cash flow being generated from operating activities. ADSL2+ A further outcome of the strategic review was to temporarily put on hold the company’s ADSL2+ project until such time that the strategy to provide a nearer -term path to profitability for the company’s core telephony business was successfully executed. With this strategy being successfully executed it is intended that the ADSL2+ project will recommence later this financial year. The intention remains for Engin to be able to offer a combined broadband access and telephony solution. TiVo Engin intends to market TiVo to its customer base as well as work with Seven and its related bodies corporate to build the retail channel relationships. To reduce funding demands, Engin has decided to relinquish its exclusivity of distribution status and in doing so, significantly reduced the performance related risk and demands on working capital carried by Engin under the TiVo distribution contract. Agreement has been reached with HTS (a Seven Group Company and holder of the TiVo rights) to vary the agreement to achieve this outcome. The company is also in discussion with Unwired in regard to examining prospective operational synergies between the two companies’ complementary product and service offerings. Engin is now better positioned to focus on its core telephony business, while still retaining the option to distribute TiVo as part of a Broadband triple play. This position materially decreases its working capital demands and will accelerate its path to profitability. Sale of the Unwired Shareholding As previously noted, the company sold its shareholding in Unwired into the bid by Seven Network Limited’s wholly owned subsidiary, Network Investment Holdings Pty Limited. A profit of $3.7 million ($3.1 million net of interest related costs) was realised on this investment. Engin has repaid the funds raised to make the initial investment, along with interest owing, to Seven. Engin remains well positioned to capitalise on Unwired’s roll out of WiMax in due course. Fund raising As previously foreshadowed, Engin will seek new equity to complete the funding of its business, including consolidation of its broadband telephony business. Details of this will be made available in early February.
ENG Price at posting:
0.0¢ Sentiment: Sell Disclosure: Not Held