11/01/2006 - 09:20

Wavenet buoyed by $3m modem order

11/01/2006 - 09:20

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Shares in Perth-based wireless telecommunications company Wavenet International Ltd have risen on news that it has received more orders for its vehicular modem device from US-based GeoLogic Solutions worth $3 million.

Shares in Perth-based wireless telecommunications company Wavenet International Ltd have risen on news that it has received more orders for its vehicular modem device from US-based GeoLogic Solutions worth $3 million.

Wavenet chief executive Steve Metlitzky said deliveries for the new order of Wombat modems are due to be completed within the current financial year and will bring Wavenet's anticipated revenue total for this year to around $11 million, double that of the previous corresponding period.

The re-order follows positive feedback from GeoLogic's customers and a strong take-up of the initial batch of units purchased in 2005, he said.

Wavenet shares added three cents to end the day at 17 cents.

Mr Metlitzky said the new order highlighted the demand for Wombat vehicle modems in the US.

"GeoLogic has been an excellent customer for Wavenet and we are very excited about how well the Wombat has performed in the field," said Mr Metlitzky.

"This order is further evidence of Wavenet's growing position in the US vehicle tracking market," he said.

"Wavenet has a strong and growing cash position and is now poised to deliver profit in FY06."

"In parallel to our existing business, the company is aggressively targeting acquisition opportunities to fuel growth and increase value for shareholders." said Mr Metlitzky.

GeoLogic provides the commercial trucking industry with wireless asset management packages aimed at reducing operational costs and improving efficiency.

Meanwhile, Wavenet chairman Edward Stroud announced the company had decided against taking the next step in acquiring a local wireless company.

The decision follows advice foreshadowed at its annual general meeting recently, that Wavenet planned to aggressively target strategic investments and potential acquisitions this year.

Wavenet did, however, acquire a discounted receivable in the company, generating a profit of $380,000 profit.

"Whilst the board elected not to take the next step in this instance, the processes used to review the opportunity have proven sound and in the end we decided to take a profit and increase our funds in order to pursue other opportunities," said Mr Stroud.

"We are forecasting strong sales for this financial year, fuelled by existing Boomer and Wombat products," he said.

"Our plans are to add to this growth by looking at opportunities that will enhance shareholder value and be received well by the market. We are planning an exciting year ahead."

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