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  • TZ Limited Operating Businesses Profitable By End FY2014 0 comments
    Oct 7, 2013 9:56 PM

    TZ Limited's (ASX:TZL) parcel locker and data centre infrastructure businesses could be operating profitably by the end of financial year 2014.

    This is based on guidance from the company today as its core operating businesses gained market awareness and traction during the financial year.

    Heralding the growth, total Purchase Orders of A$3.4M were received before the end of the 2013 fiscal year, representing a 57% sales growth against the equivalent period last year.

    Trading revenue of A$2.753M were invoiced to 30 June 2013. There is a backlog of $660,000 of orders which will be shipped in the July to September Quarter.

    The actual loss for the past financial year was $6.3M; overall the loss included significant non-cash/non-recurring expenses.

    TZ has forecast revenue growth of almost 300% for FY2014 to above $8M.

    Operating costs have been reduced by over 20%

    In all, the operating business is expected to be profitable by Q4 2014.

    Parcel Lockers

    -Singapore Post - 100 Smart Locker Banks to be deployed by end of 2014
    - Large supply contracts are under negotiation with US Corporates and Postal and Logistics Operators:

    A Major US technology corporation is expected to triple Locker Bank deployment over next 24 months

    A Master locker supply agreement with large US conglomerate … first deployment completed, is scheduled in early 2014.

    Additional Locker supply agreements are under negotiation with well known Financial Services, IT and Software multi-national companies.

    A.D.A.M. parcel locker network

    TZ's Australian Parcel Locker network (BATS:ADAM) is live with Property Owners, Carriers and Temando (e-merchant channel).

    The business is generating revenue on a pay-for-use basis-transaction fee per parcel delivery/pick-up.

    IXP Data Centre Infrastructure Protection

    -Solution of choice with major Data Centres in US, Europe and Australia … IXP turnover to more than double this fiscal year
    -Transition from manual "key-lock" to "electronic micro-security -growth driven by compliance and governance mandates
    -Revenues from Hardware Sales, Software Licenses and annuity revenue for software and technical support

    Analysis

    Today's earnings guidance provides not only an update on the traction gained by TZ's operating performance and outlook for FY2014, it also underpins our analysis that the current $18 million market cap. under-values TZ.

    It also shows momentum in building, we would not be surprised to see TZ under the watchful eye of third parties interested in grabbing a toe hold in its key businesses.

    Taken together with TZ's progress on building its Australian online parcel delivery network and potential roll-out of more ADAM lockers to Westfield Shopping Centre venues, momentum is building and based on revenue forecasts the current market valuation of $20 million is light.

    Proactive Investors continues to value TZ Limited at between $0.16-$0.20 within the next 6-9 months.

    Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX "Small and Mid-cap" stocks with distribution in Australia, UK, North America and Hong Kong / China.

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