Powerlan issues fiscal 2001 results

Powerlan issues fiscal 2001 results

Listed services company Powerlan issued its 2001 fiscal year results yesterday with an 86.6 per cent growth in after-tax profits compared to the previous year.

Powerlan managing director Theo Baker was pleased with the results, which he said confirmed Powerlan's successful evolution from commodity products and services toward intellectual property, which involved 24 acquisitions.

Powerlan posted operating revenue of $342.072 million, up 89 per cent on fiscal 2000, with an operating profit after tax of $18.645 million. The year leaves Powerlan with over $23 million in the bank as of June 30, 2001.

The figures do not consolidate Powerlan's majority share acquisition of telecommunications company Clarity International in October 1999. Clarity listed on the Australian Stock Exchange in 2000, raising $1.2 million for Powerlan which retained 41 per cent of shares and board control.

Powerlan did, however, consolidate the results of acquired company Integrated Asset Management. IAM posted a $3 million loss on the back of $8 million in revenues for the year, prompting Baker to state that Powerlan is looking to divest the majority of its interest in the technology financing company.

A statement to the ASX said that Powerlan is in negotiations concerning a transaction that may result in its interest in IAM being reduced to 35 per cent.

Also on the chopping block is Powerlan's recruitment and training division, which Baker indicated the company would look to distance itself from in a bid to become a more streamlined entity.

"It's logical it would follow [the divestment in IAM], but we're not pursuing an aggressive divestment strategy," Baker said.

Powerlan's expansion into Asia was slightly "disappointing", Baker said. He described Powerlan's initial foray as "naive" in assuming the region would be able to support itself based on Powerlan's core commodity-based services while at the same time ramping up the sale of its own intellectual property.

"Asia has been particularly challenging and disappointing for us," Baker told a conference in Sydney yesterday.

However, he assured the market the company has the sales infrastructure and the staff to now be successful in the region. "Asia is cash-flow positive [for Powerlan] now."

Going forward, Baker was coy concerning the projected growth rate for the company in the 2002 fiscal year, only saying that it would be "in excess of the average market growth".

Powerlan shares opened at $0.57 on the day of the announcement.

Photograph: Powerlan's Theo Baker

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