Multiemedia predicts it will move into profitability by the end of the next financial year after new international services contract wins, and the recent acquisition of a stake in Airworks Media.
In its latest two-year forecast, the ASX-listed satellite broadband services company said it expected to generate a profit of $1.6 million in the second half of FY05 and move to a full year net profit of $12.8 million for FY06. This follows an operating loss of more than $10 million in the last financial year.
CEO, Adrian Ballintine, said Multiemedia had experienced strong growth across both its technology distribution and two-way broadband satellite businesses in the past 12 months.
"Airworks has a major contract with Woolworths to market and produce in-store advertising content across 800 locations," he said. "With our multicasting capabilities from our satellite business we can supply them with targeted advertising at different times to reach different people, regardless of location."
Synergies between the business units would also provide Multiemedia's distribution and manufacturing arm with new sales opportunities, Ballintine said.
"Woolworths needed 800 servers specially built for the specific set of applications they were running," he said. "The next step will be to put plasma screens in every store to display advertisements, and so the cross-sales grow. The businesses feed off each other and our distribution network of a couple of thousand dealers is also a channel we can use to push our satellite products."
A year on from winning a $5 million deal to supply the US military with Internet and voice services in post-war Iraq, the company had also picked up several new contracts including supplying telecommunications facilities to refugee camps in Sudan through the United Nations and Iran through the Red Cross, Ballintine said.
"The Department of Defence contract was a good springboard for us to start providing services to other countries," he said. "It's the old story - once you have some reasonable sized customers getting benefits from new technology, it's easy to get more."
In addition, Multimedia had picked up a revenue source through selection for the Government's HiBIS initiative, a $108 million subsidy scheme to provide broadband for regional, rural and remote areas, Ballintine said. It had also been selected for the $35 million Broadband for Health initiative to provide broadband Internet access to GPs and Aboriginal Community Controlled Health Services across Australia.
Multiemedia was also exploring opportunities to collaborate with Microsoft for on-demand applications delivered via satellite, Ballintine said.