melbourneage article 18th september

Quiktrak's Olympic contract back on course
Ian Porter
September 18, 2006
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QUIKTRAK Networks has cleared what it believes to be the last hurdle between it and the servicing of its huge contract to provide asset-tracking technology for the Beijing Olympics.

The company holds a contract to supply 3.5 million modems to the authorities in Beijing to protect cars and other moveable or portable equipment.

The modems alert a central monitoring station through Quiktrak's own telecommunications network if the car is stolen and also allow the car to be tracked.

Executive chairman Andrew Unterweger reported yesterday that Quiktrak's re-engineered base stations had achieved compliance with Chinese standards, opening the way for the first deliveries of the transponders.

"We found out about the need for a compliance certificate only about two months ago," Dr Unterweger said, explaining the latest delay.

He said the contracted maker of the transponders, Hong Kong-based Warderley Group, had assured Quiktrak it would be able to deliver on the Beijing contract despite the time lost since the contract was signed.

"We have worked with Warderley for some time to make sure they can meet demand," he said. "They have told us they can make 1 million transponders a year and, if they need more than that, they have a second plant that can be used to make more."

Quiktrak will make the base stations for the network and, thanks to the switch to 3G technology, the stations will have a "throw" of around 100 nautical miles (185 kilometres), far further than conventional mobile phone stations.

Quiktrak last week reported a strong improvement in operating results which showed the effect a rise in revenue can have on the bottom line.

Revenue rose 37 per cent or just on $1 million to $3.67 million for the 12 months while earnings before interest, tax and depreciation improved from a loss of $752,000 to a profit of $588,000.

This was achieved solely on the Australian car-tracking operations, where sales of new contracts — for the tracking of exotic and expensive cars — were resumed after the new modem became available in March.

However, the operating profit was wiped out by a one-off charge of $14.1 million relating to the way the company's operations were integrated into the listed shell in 2005, via a reverse takeover.

There have been several delays since the China contract was won in September 2005, due to changes requested by the buyers.

China's decision to install Quiktrak networks across the country meant finding a new part of the radio spectrum that was available in all provinces, not just around Beijing.

The change in spectrum meant Quiktrak's base stations, the foundation of the network, had to be re-engineered. They can now be used on a wide range of frequencies.

The reporter holds Quiktrak shares