Cadmus Technology has posted a sharp drop in net profit for the year ended June.
The Eftpos machine manufacturer announced a net profit of $56,000, compared with $406,000 the previous year.
The company said it had incurred additional costs over the year in preparation for the transition to EMV-compliant products. EMV isa new secure payments system which employs a micro-chip equipped card, rather than the magnetic strips used in current systems.
Managing director Ian Bailey said the move to EMV was the single biggest change to the payments industry worldwide since the introduction of Eftpos terminals.
He said Cadmus has made substantial investments to enable it to take a lead role in the change and all Cadmus payment products were now certified to meet the new security standards.
"We estimate the New Zealand total replacement market value to be approximately $150 million to $200 million and expect to see a substantial increase in demand between 2004-2008 as many of New Zealand's 75,000-80,000 merchant terminals need to be replaced with EMV-compliant models," Mr Bailey said.
Chairman Keith Philips said while EMV was the company's immediate focus, Cadmus had also invested in developing international markets.
"Beyond the immediate EMV opportunity it is the relationships we are forming in international markets, in particular our strategic alliance with CET Technologies Pte Limited (CET), that will drive Cadmus' future growth," Mr Philips said in a statement.
He said CET's parent company, Singapore Engineering Technologies, was well established in China and India, with business interests in Britain and the US.
"We will leverage this, and other relationships, to market our products into targeted Asian countries including Singapore, Malaysia, Thailand, Taiwan, Hong Kong, Korea and the Philippines," Mr Philips said.
Shares in the company were up 1c at 14 cents in early trading today, having traded between 8.8 cents and 16.5 cents over the past 12 months.
