Wavenet posts $884k half year net profit

Burswood-based wireless telecommunications company Wavenet International Ltd has recorded a half year net profit of $884,141, an increase of 307 per cent compared to a loss of $427,781 for the previous corresponding period.

The company said the improved profitability was due to the doubling of revenues and income, up 99 per cent to $5.87 million from $2.95 million over the same period last year.

Wavenet's chairman Edward Stroud said the result reflected expanding product sales experienced during the period.

In the December half, Wavenet was successful in winning substantial new contracts in modem sales with over 30,000 combined units of Boomer OEM modems and Wombat vehicle modems delivered in the six months under review - an increase of more than 60 per cent from the previous year.

Turnover from the company's modem operations has risen by 96 per cent from $2.76 million to $5.39 million over the comparable six-month financial period.

Major client contracts won during the period include Lipman, GeoLogic, Velocita Wireless (formerly Cingular Wireless) and Itronix.

"These contracts demonstrate the strength of Wavenet's position in the wireless modem market, particularly in the America's," said Mr Stroud.

Mr Stroud said the strong interim result was also due to the addition of new products to Wavenet's offering and better trading margins reported on sales through the targeting of higher value markets as well as strategic acquisitions undertaken during the period.

Mr Stroud said the business environment in the second half of FY06 was expected to remain strong.

"Thanks to the early signing of two significant orders with Geologic of $3.0 million and NetworkCar for $1.25 million, the company is forecasting strong sales for the remainder of the year," he said.

"We are confident of achieving vastly improved full-year operating revenues with an anticipated profit of at least $1.5 million through the maintenance of good margins on products and efficient control of operating expenditures," said Mr Stroud.

"With improved liquidity and a current cash position of over $7.2 million we will continue targeting strategic investment, merger and acquisition opportunities," he said.

At 940 WST, Wavenet's shareprice had risen 4 cents in morning trade to 20 cents.