Hi ggjj,"What do TZ Limited actually do ?" is a common question...

Hi ggjj,

"What do TZ Limited actually do ?" is a common question and this issue needs to be addressed by the company. I've pointed friends to TZ's website and have frequently had to go on and explain it further. I'm sure that with time TZ will hit that sweet spot in getting their message across.

In the meantime, I will say is that it is well worth the time trying to understand this company. You will then see why virtually all shareholders believe that this technology offers an investment opportunity second to none - far surpassing those other two stocks which were mentioned on the other threads. One thing to bear in mind throughout this is that TZ currently has a market capitalization of about $30m which is 1/2-1/3 of ADO and 1/4 of MHM. TZ also currently has a cash balance of $8.5m.

To put it in most simple terms (and perhaps others have better descriptions) - TZ offers locking solutions with enhanced functionality and lower cost than other offerings, all controlled through the internet. Having said this, this simplistic definition.

Now for a more detailed explanation to the best of my memory and knowledge. Excuse the consiceness of some points.

Technology

In the 1960's, some scientist discovered that a select few metallic compounds could not only have their shape deformed while cool but also have their shap reinstated to the original state when heated. These compouds are called shape memory alloys. Their are two types - one way and two way. One way shape memory alloys memorize low temperatures. Two way shape memory alloys memorize at both low and high temperatures.

One of the compounds, and the one used by TZ, is NiTinol. This is a nickel/titanium alloy. Here are the properties as defined by Wikipedia:

Nitinol alloys exhibit two closely related and unique properties: shape memory and superelasticity (also called pseudoelasticity). Shape memory refers to the ability of nitinol to undergo deformation at one temperature, then recover its original, undeformed shape upon heating above its "transformation temperature". Superelasticity occurs at a narrow temperature range just above its transformation temperature; in this case, no heating is necessary to cause the undeformed shape to recover, and the material exhibits enormous elasticity, some 10-30 times that of ordinary metal.

So now you are propably wondering how this can be turned into an unprecedented economic opportunity. Well along came this inventor from Sydney (Dickory Rudduck) who basically took some of this alloy, soldered a miniscule microchip onto it and placed it into a mechanism (acutuator) which allowed locking. The chip was assigned an IP address and the heat application was controlled through the internet. The alloy was deformed allowing the locking mechanism to lock, and heat was applied the alloy reverted to the original shape resulting in the mechanism to unlock. In subsequent years, environmental sensors were added resulting in greater funcutionality.

Dickor Rudduck and fellow engineers patented this for a multitude of applications - basically anywhere where they saw a need for the following properties - low cost, low weight, extreme strenght and durability, environmental sensing, audit trail recording and so on. This pretty much covers the entire global $50b+ pa global fastening market.
Under the previous board, the vision was to have these 'intelligent fasteners' everywhere. This became a difficult proposition for a multitude of reasons which I won't go into. However, since the current board took over almost 2 years ago, they have been transforming the company from a hardware comapny to a hardware/software company. Basically they are taking the locking mechanism and 'encasing' it as part of a complete business solution. The net effect of this is that TZ is not a widget company anymore but instead is a business solution company with all of the original benefits of the intelligent fastener. The reason for this is that it means that TZ's solutions can be more easily tailored to individual businesses, while at the same time adding multiple revenue streams to the company eg - maintenance, hardware/software support, software updates, and most recently -financing possibiliities .

The businesses
With such a large target market, an obvious (but good) problem was - where to begin. So about 12 months ago, TZ restructured the business to focus on some key areas - some of which had the potential for relatively near term revenue. Visit each link to see the solutions.

1. PAD - Packaged Asset Delivery - http://pad.tz.net/
2. IXP - Infrastructure Solutions - http://ixp.tz.net/
3. Aerospace - http://tz.net/aero-asset-maintainability-inc
4. Intanova - http://intanova.com/
5. PDT - http://www.pdt.com/

With relatively limited capital for such a large target market, TZ have decided to partner with global leaders in each segment. This means that TZ leverages such companies' expertise as well as sales and technical resources. For PAD - TZ have parternships, in various regions, with global leader Pitney Bowes. Companies like Microsoft are now using TZ's PAD solutions.

For IXP - TZ partenered with the global leader in Datacenter cabling - Anixter. An increasing number of banks, government agencies and Fortune 500 companies are now using TZ's cabinet locking solutions.

For Aerospace - long lead times in this industry, but TZ have previously engaged with Boeing and Airbus.
Intanova and Aerospace are fledling business units with minisculy resources currently.

PDT - A quick synopsis - A few year ago TZ bought one of the USA's top design companies. Annual revenues are about $18m pa and are growing at 20%+ pa. With a net profit of about $2m pa, PDT alone is worth in excess of TZ's current market cap.

Management

Mark Bouris is as high profile as you can get for a Chairman, especially considering TZ's market cap. He also has a track record of turning fledling companies into well know brands. Keep an eye on YBR when it lists in 3 weeks. You will see adverts for YBR on Channel 9, and some of this publicity will rub of on TZL - and maybe vice versa when TZL begins to make a name!

Mark Bouris
Chairman and Executive Director
Mr Bouris has been involved in the finance and property sectors for over 25 years. In 1996, he founded Wizard Home Loans � which became one of Australia�s largest non-bank lender. From 1996 to 2004, Mr Bouris introduced four substantial capital partners to that business. The money was raised with subscription from Publishing and Broadcasting Ltd, E Corp Limited, Deutsche Asset Management Ltd (representing four Australian industry funds) and ABN Amro Australia Limited. All of these entities became equal shareholders in the group holding company Australian Financial Investments Group Ltd. Each of the above shareholders had two board seats and Mr Bouris was executive chairman.

Australian Financial Investments Group Ltd made a major acquisition in 2002 from ABN Amro Australia Limited when it acquired Australian Mortgage Securities Ltd (AMS). AMS was a global leader in issuance of Residential Mortgage Backed Securities. Following the acquisition of AMS, Mr Bouris chaired that part of the business and attended the global road shows in raising those funds. In 2004, General Electric acquired the Australian Financial Investments Group Ltd and its subsidiary company Wizard Home Loans Ltd, from companies associated with Mr Bouris, Publishing and Broadcasting Ltd, E Corp Limited, Deutsche Bank Asset Management Ltd and ABN Amro Australia Limited. Mr Bouris was retained as non-executive chairman by General Electric until February 2009 when his tenure terminated.

In July 2004, Mr Bouris was appointed Adjunct Professor (Banking & Finance and Business Law & Tax) at the University of NSW and also sits on the Australian School of Business Advisory Council Board. He is also an industry leader on consumer protection issues, having chaired the Federal Government�s enquiry into E-Commerce and consumer protection in 2001.

Mr Bouris is the founder and chairman of Yellow Brick Road, a financial advisory firm. The primary function of YBR is providing financial advice and accounting services. Yellow Brick Road (YBR) owns a number of accountancy practices and one legal practice. In addition, it owns financial planning businesses and insurance broking businesses. YBR advises a range of clients from small business to large business in most aspects of finance, tax, fund raising, accounting standards and audit. Mr Bouris is a fellow at the Institute of Chartered Accountants and YBR has 40 professionally qualified staff in its Sydney Head Office.

Kenneth Ting
Executive Director and Company Secretary

Mr. Kenneth Ting has a background in accounting, law and investment banking with a focus on the commercialisation of technology and public and private equity raisings. Mr. Ting joined Deutsche Bank in 1997 after 4 years at PricewaterhouseCoopers Corporate Finance and Tax division. He was Vice President of Technology Investment Banking at Deutsche Bank and worked in Deutsche Bank's Sydney, San Francisco and London offices.

Mr. Ting has a passion for technology and has worked with technology companies throughout his career. He has been involved in the completion of over $5 Billion in M&A, private equity and IPO assignments in Australia, USA and Europe. His industry specialisation is in the electronics manufacturing, software, IT services, telecommunication and Internet sector.

Mr. Ting holds a Bachelor of Commerce and Bachelor of Law with First Class Honors from Adelaide University and is a member of the Institute of Chartered Accountants. Mr. Ting is currently an Associate Director of Nextec Strategic Capital, a Technology Investment Banking firm based in Sydney. He is also a director of an international telecommunications company which he founded in 2002.

Dickory Rudduck
Executive Director

Mr. Rudduck is a prolific inventor and is the founder and source behind TZ Limited's technology and thinking. An Architect by profession, Mr. Rudduck established and built a successful Sydney based industrial architectural practices over a 20-year consulting career.

Mr. Rudduck is recognized as a respected industrial and interior designer with past corporate clients such as Deloitte and Touche, Barclays Bank, Warners and Alcatel. At one stage, Mr. Rudduck managed the design of over one million m2 of industrial space for Slough Estates, one of the largest industrial property developers in the world.

The success of his consulting practice enabled Mr. Rudduck to focus on his interest in innovation and invention and allowed him to establish Intellectual Exchange Pty Ltd in 1996, with the objective of developing intellectual property with global relevance and application. Since then, Mr. Rudduck has successfully commercialized many of his creations, the most lucrative being patented furniture systems with revenues in excess of $40 Million. He has explored a diverse range of patented concepts from electronic hardware and software developments, building and construction systems to even sporting inventions. Some of his innovations include an on-board video switch and software for the IBM PC, a low cost housing solution for developing countries and a multi-functional golf tee that integrates a pencil and eraser within the �tee� form.

In 1999, Mr. Rudduck co-founded Telezygology Pty Ltd with John Wilson and has since focused all his attention on developing the intellectual property and technology portfolio for the company as Chief Technology Officer.


Anyway, I'm going to cut it short there as there is far too much to mention.

The questions you are probably asking yourself are "What's the catch?" and "If this is going to be one of Australia's greatest exports then why is the share price only 28c?"

Well part of the answer to that lies in your comment "I have started to have a look at TZL tonight, but i am struggling to get my head around what TZ limited actually 'do'"

People generally don't invest in what they do not think they understand. However, as the financials are improving, the market will understand increasing revenue and take a closer look. Until then, this is the ASX's best kept secret/undervalued stock...bar none. At the very least it deserves a place on every shareholder's watchlist

Am happy to be corrected on any of the above.