multiemedia rocketed 60 per

Multiemedia's satellite vision finally pays off
By Colin Kruger
October 16, 2004

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Shares in technology group Multiemedia rocketed 60 per cent on Friday after the loss-making company forecast a $12.8 million profit by 2006, largely driven by its successful bet on broadband via satellite services.

Multiemedia shares jumped 1.4c to close at 3.8c on Friday, with more than 37 per cent of its issued stock traded, following the company's two-year forecast, which it said was underpinned by the recurring nature of its satellite revenues.

The company said its broadband satellite division, NewSat, was "now living up to initial expectations" and it expected strong growth from its majority stake in advertising content provider, Airworks.

But as part of a broader turnaround that includes Multiemedia's technology distribution business, the company has forecast that all of its divisions will report positive underlying earnings for the six months to June 30 next year.

Revenues are expected to more than double over each of the next two years, as the company engineers what will be a massive turnaround from $60 million worth of accumulated losses over the past four years.

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Multiemedia has forecast a loss of $1.7 million on revenues totalling $51.6 million for the year to June 30, 2005, which will turn around to a $12.8 million profit on revenues of $110.8 million the following year.

This compares with a loss of $10.2 million on revenues of just $18.8 million last financial year.

Multiemedia chief executive Adrian Ballintine attributed the loss to the start-up costs of the satellite business.

At the annual meeting last month, he said the satellite venture was the "jewel in Multiemedia's crown" after signing up more than 1000 customers in its first year of operation.

The business has access to markets across Australia, Asia and the Middle East and has made sales in a number of these markets, including Iraq, Iran, Saudi Arabia and Afghanistan.

Mr Ballintine said the company was planning for a US listing "when directors believe the company is sufficiently mature to attract American investor support".