Cadmus Technology enjoys unfamiliar sensation - a profit

By PETER GRIFFIN

After racking up nearly $20 million in losses over the past two years, listed payment terminals maker Cadmus Technology has entered uncharted territory - profitability.

Cadmus turned a profit of $236,000 in the three months to September 30, a result bound to clear the bitter aftertaste of an $18.2 million loss sustained in the year ending June 30.

The more promising result was based on quarterly revenue of $4.1 million. Earnings before interest, tax, depreciation and amortisation (ebitda) were $700,000.

That level of profitability at the operating level puts Cadmus a quarter of the way towards a target agreed with JBWere's investment arm, Private Equity No1 Fund.

JBWere has invested $1 million in Cadmus and will invest $1 million more if Cadmus has full-year ebitda of at least $2.9 million at the end of this financial period. Share price targets were built into the deal.

All going well, that would increase JBWere's share of Cadmus from 8.85 per cent to 13.8 per cent.

Cadmus' sales were up significantly and 2300 terminals have been sold already this financial year.

Around half of those terminals went to Australia and Asia. Cadmus sold 3300 terminals last year.

The company also said it had won a larger chunk of the domestic market for eftpos terminals, increasing market share from 10 per cent to between 25 and 30 per cent.

Fellow listed tech company Commsoft has not faired so well. Its finalised financial accounts yesterday showed a bottom-line loss of A$6.4 million for the year to June 30.

That compared with a loss of A$21.8 million in the previous year, which was followed by cost slashing and the closure of foreign offices in a move to keep the company afloat.

Commsoft's UK distributor Techtel and its new South African partner are reporting improving sales, but Commsoft said profitability was still some time away.

"While Commsoft still has its work cut out to reach profitability, management are confident of further improving on last year's performance," said managing director Mark Lunt.

Commsoft had raised $460,000 through the placement of shares and convertible notes with investors. More money had been put into the company by parties associated with chairman Trevor Kennedy, who will step down at the end of the month.