time to come clean

You had a chance to ask any questions, and personally I think you got clean answers. CEO – Rodd (tech guy) did an excellent job and brought Lumacom to the stage it’s at now. From this stage, appointing a new guy who is more MARKET orientated is an excellent decision and will be a great benefit for Lumacom. BTW, Sala will still retain a board position. To make a judgment to all existing and also future potential new investors, Lumacom will provide you with photographs showing the installations which will be available on www.lumacom.com.au, and therefore it will be very convenient and informative on what is actually happening. Also reports from the Contractors will be appreciated. BTW Thanks Nina for early indications.
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MD TO THE AGM


Dear Sir,
MAN A G I N G D I R E C T O R ’ S A DD R E S S T O T H E A GM
We attach the Managing Director’s address to the 2004 Annual General
Meeting.
There is also a short powerpoint presentation to be delivered to the AGM
which will be posted on the Lumacom Limited website in the Investor
Relations Section.
Yours sincerely,
Wally Borovac
Company Secretary
Lumacom Limited
Managing Director’s Report
Annual General Meeting
25 November 2004
The Company has made significant achievements during the past year which are
summarised as follows:
1. Installation of the land-mark sign at the Nasdaq building situated in Times
Square, New York is currently in progress.
• The sign modules (272 in total) have been manufactured and shipped to
New York.
• All steel and structural work has been fabricated.
• All matters involving the lease and approvals are complete.
Commissioning is expected to be finalised early in the new year. The Nasdaq
sign will be the largest roof top electronic sign of its type in the world and a
prominent landmark on the Manhattan skyline.
2. Lumacom has entered into an agreement with global outdoor giant, Clear
Channel – Spectacolor as media sales agent for the Nasdaq project. Clear
Channel is the largest outdoor advertising company in the world and its
appointment to the project represents
• access to the largest client base in the world;
• the opportunity for future growth within all of Lumacom’s target markets;
and
• significant credibility for the technology.
3. The Company’s Turkish agent (Itoas) is proceeding according to plan with all
396 sqm of LumaPanel fully manufactured and shipped to Istanbul, invoiced
to Itoas and ready for installation. Commissioning will occur immediately
after the commissioning of the New York project.
Our annual report for the 2004 financial year highlighted the issues the Company has
had to contend with, however the progress of the Company since then has been strong
and focused. The new strategy and program for growth is now in place.
United States of America
Background
Lumacom originally sourced and secured the Nasdaq - 4 Times Square site and
subsequently engaged Totius media as its cooperative partner and selling agent.
Totius was chosen for this role because of:
• its keen desire to be a part the Company’s Joint Venture strategy;
• a tenacious and enthusiastic “boutique” business style;
• their experience in property; and
• their marketing skills in electronic signage.
On this basis, our initial business model was based upon securing an advertising
agreement before any commitment to install a sign was made. This was seen as a low
risk strategy, however potential advertisers wanted to “look and feel” prior to
committing a part of their advertising budget to such a new technology. In response,
the Company resolved to build and own the sign at the Nasdaq building and to use
this as the forerunner to its revised corporate strategy.
Clear Channel
Lumacom’s improved recognition in the US attracted the interest of Clear Channel –
Spectacolor of New York. Clear Channel was appointed Lumacom’s media agent for
the Time Square project. This appointment is well timed, coinciding with the current
installation phase of the Nasdaq sign.
Clear Channel brings significant credibility:
• 800,000 sites world-wide;
• represented in 65 countries world-wide including our focussed regional targets
of USA, UK, Europe and Asia (specifically China and Hong Kong)
• annual revenues of $US9bn for the 2003 year.
• Clear Channel has a market capitalisation of $US19 billion.
Clear Channel, as a world-leader in outdoor signs, and in particular “spectaculars”,
which suits Lumacom and brings with it a defacto endorsement of the LumaPanel
technology. This is of significant importance to our long-term growth and strategy of
building a network of Lumacom signs internationally.
Since its appointment last month, the Company has been working closely with the
executives of Clear Channel to secure an advertiser. On the back of a successful
outcome to the Nasdaq project, the Company will revisit potential sites previously
identified as well as search for new sites throughout the US in co-operation with Clear
Channel.
Installation
Installation work on our LumaPanel sign at the Nasdaq building is in progress. The
installation contract is with Spectrum Signs, a sign erector with considerable
experience on large buildings in New York. All 272 LumaPanel modules making up
the sign were manufactured and shipped to New York 2 months ago. The installation
process is a complex one, given that the sign platform over-hangs the building some
50 stories high, requiring consideration for a host of strict safety issues during
installation and post commissioning. The safety netting (which might sound like a
simple task but indeed an important and time consuming process) has now been
finalised and the steel base supports to which the 272, one square metre LumaPanel
modules are affixed are now in the process of installation. Photographs showing the
sign’s installation will soon be posted on our web-site so its progress can be
monitored. The installation schedule is very much governed by prevailing weather
conditions, however, commissioning for the sign in day-time operation is earmarked
for January 05 with electronic commissioning to occur during the ensuing 4 weeks.
New York Landmark
It is important to remember that the Nasdaq project at 4 Times Square is a spectacular
site providing a flagship reference installation for Lumacom which few other sites
will be able to match. Being the largest sign of its kind in the world, it will dominate
the Manhattan skyline and will be seen from many vantage points in New York and
New Jersey.
Turkey
The Company’s arrangement with Itoas has progressed seamlessly. The original order
for 2 signs totalling 260sqm for installation atop of the Marmara Hotel in Taksim
Square has been increased by 100sqm to a total of 360 sqm. The modules have been
manufactured and shipped to Istanbul. Itoas has met all of our expectations.
In addition, ITOAS placed an order for a 36sqm LumaPanel screen for another hotel
in Istanbul for rooftop corporate branding. This sign has also been shipped and is
ready for installation. Subsequently, this order has been increased to a total of 54sqm.
Installation of the Turkey sign is to follow the various stages of the Nasdaq sign
installation in sequence. Engineers from ITOAS (which has offices in New York) will
be trained during the installation in New York. Stage-1 training with Lumacom’s
installer in New York, Spectrum Signs, has already taken place.
In association with Itoas we are currently in the process of selecting a suitable outdoor
media sales agent. We have short-listed a number of potential media agents including
Clear Channel’s Istanbul based office.
Europe
Currently, the Company is actively seeking new media sales agents for various parts
of Europe and will look to revisit a number of sites that potentially meet the
Company’s criteria for the erection of its signs. We are currently in dialogue with a
number of media companies, including Clear Channel, in the UK and Europe with the
view of entering into an arrangement similar to that developed in New York.
In Barcelona the Company is now dealing with the head lessee at the Maremagnum,
site at the Port of Barcelona which has laid claim to the 50% interest previously held
by Mega. We are currently in the process of discussions with this party to develop a
plan for the future. Whilst these negotiations are ongoing, alternatives discussed
include a new JV with the head lessor, a direct sale or lease of our half ownership of
the sign, or the engagement of a third party media agent. We are currently not
receiving revenue from the sign in Barcelona nor are we incurring any on-going costs.
Activities in Greece continue with our partner advising agreements have now been
entered into with site landlords. Our decision to pursue opportunities in the Greek
market has been demand driven with our Greek partner (an associate of Kiska in
Turkey) approaching Lumacom. We are currently addressing the stringent regulatory
approvals applicable to the installation of all outdoor signs in Greece. We are
addressing these regulatory matters with the new government. The government is
considering review of these regulatory matters following a hiatus during the Olympic
games.
Review of Company Strategy
As outlined in the Company’s 2004 annual report, the Board of Lumacom has
reviewed its strategy for the roll out of its technology and product range. The
Company will now focus on its LumaPanel product because of its unique features and
comparative low cost. The Company strategy has 3 key elements:
Ownership and control over sites – Lumacom will seek prominent high quality sites
for LumaPanel installations on a wholly owned basis when there is not a JV partner
involved.
Control of the lease and approval process – Utilising independent property experts
to source sites on the best possible deal basis ensuring that the approval process is
carried out expeditiously and not reliant upon outside parties.
Advertising Sales – Appointing large and successful specialists in the market as
media agents on a site-by-site basis.
The new strategy is premised on Lumacom taking greater control over the distribution
of its products and not relying on outsourcing.
Territorial focus will be on USA, Europe (including UK) and Asia (limited to HKG
and mainland China).
The Company will build an asset base from which it will generate an ongoing,
recurring revenue stream. We will identify those sites with the potential to deliver the
maximum return on the Company’s investment.
The New York sign represents the first and most prominent of the network of signs
we wish to build under our strategy.
1. It is owned by Lumacom exclusively; and
2. The location will be a New York landmark with global recognition.
Therefore the benefits are both financial and promotional giving the Company the
largest media exposure possible.
The decision to build and own the New York sign was made in mid 2004 and whilst
the sign will be a valuable asset of the Company, it was prudent to raise additional
capital to underpin the Company’s investment. Accordingly the Company made a
$1.1m placement in October 2004 to clients of Intersuisse.
Management Review
The Company’s strategy also requires a review of its Board and current Executive
Management team.
We are looking to strengthen the Board with the appointment of new members who
will bring with them financial and commercial expertise. Resolution 3 in today’s
meeting, requests approval for an increase in the total Directors’ fees from $75,000 to
$150,000. This is not an automatic increase for Directors but merely a ceiling of total
fees which can be paid. With the introduction of greater corporate governance
guidelines, we expect to have to pay larger Directors’ fees to attract suitable new
directors to our Board. This increase is earmarked for the new appointments. We
encourage your support on this resolution.
Robert Wilkerson has recently been appointed as a Director. He has extensive skills,
knowledge and experience in the UK and European Media industry gained over some
18 years involvement in the industry. He is the Managing Director of Target NMI, a
London-based media division of publicly listed entity, NMI. As a founding Director,
Robert built the business into a highly successful top 20 media agency with a
prestigious list of clients. He provides an ideal “on the ground” Director for Lumacom
in the European region. We strongly recommend shareholders vote in favour of his
appointment.
With respect to the role of CEO, we believe it is appropriate the Company seeks the
services of an industry specialised and experienced Chief Executive Officer to take
the Company to the next important stage. The Board is currently assessing candidates
for this position. I, as the outgoing CEO will retain a Board position and assist in any
way the Board sees fit, continuing my work commitment to the Lumacom strategy
without compromise.
Conclusion
Lumacom is a start up company which has faced and met a special challenge; to
singularly educate the market on a new technology. The process has been longer than
expected, however, this has been achieved and, as with everything, all good things are
worth waiting for. It is a testament to the management team that we have dealt with
these challenges. All Directors, management and staff have worked tirelessly in the
process and I thank them for their efforts.
We would like to thank our outgoing CFO, Ms Sam Andersen for the contribution she
has made to the Company and we wish her well in her future endeavours. A special
thankyou goes to Russell Goodrick who has provided his services well beyond the
call of duty as a non-executive Director. In particular, I thank him for his valuable
contribution and assistance in New York earlier this year during negotiations with
Clear Channel and again in October for his assistance in meetings with our Greek
associates in Athens. On both occasions, on his own time and, with the greater part, at
his own travel expense. Russell’s background in media, through both Channel 9 and
his privately owned advertising, promotions and public relations company, provides a
valuable insight for the Board and Management. We urge you to retain Russell’s
involvement in the Company by voting to re-elect him under resolution 1 of today’s
meeting.
The strategy of owning our assets and generating a strong, recurring revenue stream
has been embraced and the Company is now well poised for the next stage with the
finalisation of the Nasdaq sign project.
I thank you for your ongoing support and look forward to sharing Lumacom’s
exciting future with you over the coming year.