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TZ Limited Achieves Revenue Guidance

TZ Limited (ASX:TZL) has hit a key milestone, achieving previous guidance of $8 million in accrued revenues for the financial year ended 30 June 2014.

While operating cash flow revenues notched $6.3 million for the financial year.

This is due to major new customer endorsements and contract wins that validated the competitive strengths of its proprietary smart lockers and data centre cabinet protection systems.

The company had recorded almost $3.5 million in sales revenue in the fourth quarter of 2013/14, bringing ground year result to more than the $8 million it had forecast at the start of the financial year.

Notably, this momentum, traction from new products and the roll out of customer installations programs underpin strong growth expectations for the 2015 financial year.

Both its Data Centre industry (NYSEARCA:IXP) and Automated Parcel Locker and E-Commerce (PAD) businesses delivering on anticipated growth with IXP doubling its sales while PAD almost triple its top line numbers over the previous year.

In addition, the IXP and PAD business received cash inflows of $1.82 million in the fourth quarter of the 2014 financial year, up from $595,000 they received in the same period the previous year.

The company believes the outlook for sustained sales growth in the 2015 financial year is extremely positive particularly with the prospect of a number programs moving from initial deployments into broader scale rollout such as Pos Indonesia and Poste Italiane.

It will provide its revenue guidance for the 2015 financial year when it releases its Appendix 4E.

Infrastructure Protection (IXP)

The IXP business delivered a strong result this quarter supported by the shipment of the large backlog of purchase orders in the Americas together with new stocking orders from its established distribution channel.

This growth is due to several major multi-national companies now standardising on IXP Systems as their solution of choice for data centre micro-security.

Adoption of TZ's solutions by several large organisations in the 2014 financial year should underpin continued growth into the 2015 fiscal year.

Sales of its TZ SlideHandles™ have been increasing for direct connection to third party control systems, a segment previously dominated by manufacturers of traditional solenoid based electronic locks.

This is extremely promising, as it shows customers clearly differentiating TZ's SMArt Locking as the value added preference over other simple and cheaper electronic locking options.

It is also seeing strong interest in the adoption of its Centurion Server™ management software.

Two significant software wins to major corporates in the June quarter show that investment in TZ's IXP software development is paying off.

The U.S. business has also secured its first major Enterprise Support Services agreement locking in annuity revenues with a formalised technical support and maintenance contract.

In Europe, a steady level of sales were maintained despite an expectation for significant sales growth on the back of the committed purchase orders for the major Defence Agency project that was scheduled for implementation over the last six months.

Delays in infrastructure construction and the knock-on effect on the timing of data centre fit-out and deployment will push sales into the 2015 financial year.

The company has also forged new ground in the Europe, the Middle East and Africa region with establishment of a distribution arrangement with the Bytes Technology Group based out of South Africa.

This is expected to see its IXP product sales expand to the African region.

In Australia, IXP sales showed strong and steady growth as NextDC and Macquarie Telecom continue to expand their operations and other major data centres start to come on line.

Sales have also been fuelled with increasing activity in the Corporate and Government sector due to PCI-DSS compliance requirements.

Prospecting efforts in Asia are starting to yield results, with the newly appointed Asian Regional Distributor and Certified Integration Partner LanTroVision placing their first stocking orders in anticipation of a number of significant projects coming to fruition in Indonesia, Hong Kong and Singapore.

Last but not least, interest in the new TZ SwingHandle™ product continues to build in several markets as several OEM customers are in the process of evaluating product samples. First sales are expected this calendar year.

Packaged Asset Delivery (PAD)

The company's PAD business demonstrated a 178% increase in unaudited year end revenue of about $5 million/

With purchase orders already in hand from Singapore Post covering the 100 Locker Bank deployment to the end of the calendar year, there is a strong flow of on-going business into the first half of the new fiscal year.

Discussions are currently underway with Singapore Post for the next phase of development and deployment which will see extension of the Locker Services offering to businesses (B2B) and to consumers (C2C).

The company has also successfully deployed Locker Banks for Pos Indonesia and Poste Italiane.

As these initial deployments open up to public use and locker deliveries and pick-ups become an extension of normal services, pressure for on-going national roll-out should increase prompting further deployments from these postal organisations just as we have seen in Singapore.

TZ also won a major supply contract in the U.S. with a well-known logistics and transportation company. The first stage deployment of several Locker Banks is scheduled for later this calendar year.

Corporate customers in the U.S. now represent top global players across the financial services, IT and Technology sectors.

Its U.S. business is expected to continue on a strong growth trajectory for the 2015 financial year with a number of multi-location purchase orders and master supply agreements now coming to fruition.

Of particular mention is the recent award of a multi-location purchase order from a well-known internet company based in California. This order also marks a significant milestone for the U.S.
PAD business with sales of over 100 SMArt Locker Banks in the North America corporate market.

Additional orders for deployments from several prominent property management firms have also been made with its TZ Concierge offering, leaving it well positioned to leverage the growth in the high density residential market.

In Australia, TZ has received initial purchase orders for the supply of the electronic locking solution and software for day lockers to be used at Westpac's new Melbourne office in Collins Street and at their head office at Kent Street in Sydney.

Both projects will continue to rollout over the first quarter of the 2015 financial year, and will be installed by TZ's accredited integrator ACG Fire & Security.

With TZ nominated as the preferred Locker Management Solution for Westpac, this is promising as the bank plans to occupy over 60,000 square metres of office space at Barangaroo in early 2015.

This win has also led to several major Australian corporate, government and institutional organisations showing a keen interest in the company's Managed Mail and Day Locker solutions.

In the U.S., the company has started to promote its Day locker solution to its existing portfolio of customers that is already utilising its Managed Mail solution.

Initial interest has been good given our customer's familiarity with TZ technology.

Given the larger size of corporate offices in the U.S. compared to Australia and the prevalence of "hot desking" in the US, TZ's Day Locker solution should provide strong revenue growth for the company going forward.


With TZ Limited exceeding previous guidance of $8 million in accrued revenues for the financial year ended 30 June 2014, traction from new products and the roll out of customer installations programs, there is blue sky ahead for the company's growth in the 2015 financial year.

Notable deployments include the 100 Locker Bank deployment to the end of the calendar year with Singapore Post, the recent award of a multi-location purchase order from a well-known internet company based in California and its nomination as the preferred Locker Management Solution for Westpac.

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