Revenue lift cuts Advanced Braking loss

19/08/2008 - 15:03

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A 74 per cent increase in sales revenue has reduced Osborne Park-based Advanced Braking Technology Ltd's annual loss for the 2008 financial year by $910,000.

Revenue lift cuts Advanced Braking loss

A 74 per cent increase in sales revenue has reduced Osborne Park-based Advanced Braking Technology Ltd's annual loss for the 2008 financial year by $910,000.

The company today reported a loss for the year of $1.03 million, up 47 per cent compared to fiscal 2007's loss of $1.9 million, while sales revenue was up 74 per cent to $4.4 million, up from $2.5 million.

Managing director Ken Johnsen said today the increase in sales revenue over the year reflected the higher margins and greater penetration of key markets.

"This pleasing result is a direct consequence of the significant modifications to our marketing and sales model implemented during the year to improve the range of equipment and services we offer and increase our level of penetration of the mining sector both in Australia and overseas," Mr Johnsen said.

He added that the company's sales model would be further developed in the forthcoming year following the successful rights issue in June 2008, which raised $1.1 million. The shortfall offer remains open until September 19.

The company intends to use the funds to open regional service centres in Australia and South Africa to support the mining industry.

Meanwhile Mr Johnsen said the company is looking to expand beyond the sale of braking products in order to create a sustainable and diversified automotive engineering consulting business.

"Recent examples of our success in this area include the A$4 million, 4-year refuse truck contract announced during the year and substantial contracts for the development of a concrete agitator and Hino driveline brake," Mr Johnsen said.

 

Below is the full announcement:

 

Advanced Braking Technology Limited (ASX: ABV) is aiming to further diversify and expand its sales efforts in the year ahead after today posting a 74% increase in sales revenue to $4.4 million for the 2008 financial year. The strong sales performance enabled the Company to cut its annual loss by $910,000 to $1.03 million.

The Perth-based Company said today (Tuesday) that it made further significant progress towards self-sufficiency and achieving a break-even performance during the year with continuing strong take-up of its patented Sealed Integrated Braking System (SIBS) products worldwide, particularly in the strongly performing mining sector.

"While SIBS remains our cornerstone product, we are also looking beyond the sale of braking products and we have intensified our efforts to create a sustainable and diversified automotive engineering consulting business, specialising in braking systems," commented Advanced Braking's Managing Director, Mr Ken Johnsen.

"Recent examples of our success in this area include the A$4 million, 4-year refuse truck contract announced during the year and substantial contracts for the development of a concrete agitator and Hino driveline brake," he added.

The Company today posted a net loss for the year of $1.03 million, compared with a loss of $1.939 million for the 2007 financial year. The result was struck on sales revenue of $4.392 million in 2008, a 74% improvement over the 2007 full year result of $2.531 million.

Mr Johnsen said the significant increase in sales revenue and strong operational performance in 2008 reflected higher margins, greater penetration of the key markets being serviced by the Company in Australia and overseas, and the high level of demand for automotive engineering services on a fee-for-service basis.

"This pleasing result is a direct consequence of the significant modifications to our marketing and sales model implemented during the year to improve the range of equipment and services we offer and increase our level of penetration of the mining sector both in Australia and overseas," he commented.

Mr Johnsen said the Company's sales model would be further developed in the forthcoming year following the successful Rights Issue in June 2008, which raised $1.1 million. The Shortfall offer will remain open until closed by the Directors on 19 September 2008.

Advanced Braking will use the funds raised to open regional service centres in Australia and South Africa to support the mining industry. "We recognised a need to be closer to the operations of our end customers both from a sales and service point of view," Mr Johnsen said. "While agents provide a certain level of service, there is nothing like having direct contact with customers - and the service outlets will carry inventory and be staffed with salesman and trained brake installers.

"We are confident that, when our marketing and sales network is rolled out on a broader scale, it will result in higher sales and improved margins," Mr Johnsen added.

The strong performance has been achieved through ongoing sales of mainstream products plus the development of new braking products for Fuso Canter and the Isuzu NPS 300 trucks in the previous year which now form an important part of the Company's product portfolio.

In overseas markets there was growth in New Guinea, South Africa and North America with initial activity in other parts of Africa and Europe. Having established a solid initial entry into South Africa, Advanced Braking expects that this market has the potential to grow equal to the Australian market in the coming year. Also, in the coming year the Company will push to establish regular sales into Indonesian mines and gain an initial entry into South America as well as continuing activity in Europe.

Mr Johnsen said the Company was also planning to further expand its product offering to include various truck and light commercial vehicle applications including Nissan Patrol, Mitsubishi Triton and several other Nissan applications.

As has been demonstrated with the refuse truck, concrete agitator and Hino brakes contracts, the Company has the ability to earn significant revenues from development activity. In the coming year other opportunities in the military and railway sectors will be pursued as well as the more traditional fee-for-service contracts.

"We are now exploring the opportunity to provide braking solutions to a number of new markets and products including larger brakes for various trucking applications," Mr Johnsen said. "These products will supplement our continued market penetration, both locally and internationally, in the mining industry."

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