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SGX-LISTED STRATECH SYSTEMS REBOUNDS SHARPLY TO PROFITABILITY IN 2003 ON HIGHER RECURRING REVENUE; EYES GROWTH FROM HOMELAND SECURITY & TRANSPORT
SINGAPORE, March 01, 2004 -
Stratech Systems Limited (“Stratech”) reported that it had rebounded sharply to profitability in 2003 on the back of increased turnover largely from higher recurring revenue, stringent cost controls and efforts to improve productivity, and said it is well-positioned to tap the economic recovery this year, particularly through its proprietary Homeland Security and Intelligent (Air, Land and Sea) Transport Systems.
The Singapore Exchange Main Board-listed emerging world-class Advanced Technology and e-Systems developer said its net profit after tax swung to a profit of S$1.3 million in the financial year ended 31 December 2003 (“FY 2003”) from a loss of S$42.6 million in FY 2002.
The profit was achieved on the back of turnover of S$22.3 million in FY 2003, a 31.1% rise over FY 2002 despite weak economic conditions worsened by the Iraq war and SARS epidemic.
The improved turnover was due to higher recurring revenue which increased to S$5.7 million in FY 2003 from S$4.7 million in FY 2002 and billing for fresh contracts amounting to S$5.5 million.
By product segmentation, intelligent Transport Systems (“iTS”) accounted for 49% of FY 2003 Group revenue, e-Systems 39% and Computer Vision 12%. During the year under review, the revenue of new businesses recognised comprised:
• Flow-down sale of software license sale and hardware (e-Systems/iTS) – S$2.7 million
• Flow-down, recurring service (e-Systems/iTS) – S$0.8 million
• New capability/product sale (e-Systems) – S$1.7 million
• Product sale (Computer Vision) – S$0.3 million
While revenue rose, total costs and expenses incurred in FY 2003 fell by about 64% in FY 2003 compared to FY 2002 due to reduced third-party costs; tighter cost controls and increased productivity; settlement of the Land Transport Authority (LTA) transit.smart Contract (announced in FY 2002) in which certain provisions prudently made in FY 2002 did not materialise in FY 2003; stringent approach in treatment of development expenses; focus on bringing developed products to market; and reduced depreciation and amortisation.
Earnings per share rose to 0.49 cent in FY 2003 from a loss of 15.95 cents in FY 2002, while Net Asset Value per share rose to 2.17 cents from 1.69 cents, respectively.
Commenting on the performance, Stratech’s Executive Chairman, Dr. David K.M. Chew, said: “Despite the weak operating climate worsened by the Iraq War and SARS, Stratech has bounced back sharply to profitability. Such a strong turnaround validates our combined strategies to control costs and improve productivity while bringing our array of innovative products to the market place.
“We have not only reduced costs dramatically but also instituted a culture of productivity enhancement. However, this has not diminished our vision to deliver breakthrough technological products under our “Connected Reality” vision – which combines our core competencies in Computer Vision, intelligent Transport Systems and e-Systems and renders them in an integrated and seamless manner to customers in real-time,” he said.
Stratech has implemented flagship projects such as the Wireless Gatelink for Boeing at Changi Airport, the next generation Electronic Road Pricing (ERP II), intelligent Vehicle Access Control System (iVACS™) which was featured in service during the recent visit of US President George W. Bush to Singapore and the new Parliament Reporting System based on the Commonwealth Hansard Standard.
“Our strategy for FY 2004 is to build upon the restructuring which is now complete and which will help us contain costs while we focus on bringing our products and technologies to the international marketplace. With heightened concerns about the threat of terrorism and the need to increase security-related spending, we are confident that our Homeland Security and intelligent Transport Systems will find a ready market globally. And we are doing this through a combination of direct and partner sales channels and strategic alliances,” Dr. Chew said.
“In short, we will lower costs and increase global sales to turn to reality our vision to be a world-class Advanced Technology and e-Systems developer. Barring unforeseen circumstances, we are optimistic that our performance will further improve in FY 2004,” he added.
About Stratech Systems Limited
Stratech Systems Limited ("Stratech") is an emerging world-class Advanced Technology and e-Systems developer. Stratech delivers large-scale real-time mission critical systems for Governments and Businesses in the Homeland Security / Defense, Transportation and e-Business / e-Government markets. Stratech brings together world-class expertise, software, intellectual assets and unique technology capabilities in the areas of Computer / Intelligent Vision, intelligent Transport Systems (iTS) and e-Systems to enable her customers to meet existing and future operational challenges, gain significant strategic advantage and seize new business opportunities. Stratech focuses on providing products and solutions to real-world challenges where traditional IT technologies are inadequate. Stratech's "Connected Reality" solutions exploit state-of-the-art Info-Comm Technologies that connect the Net and the real-world more effectively and transparently, thereby enabling customers to leverage on the power of the Net to solve difficult real-world challenges.
Formed in 1989, Stratech has established an impressive track recording serving customers in industries such as Government, Homeland Security, Defense, Transportation (land, air and sea), Aerospace, Healthcare and Financial Services. Stratech is recognised as a leader in innovation and technology, is extremely entrepreneurial, developing and implementing advanced technology solutions that achieve significant business transformation and competitive advantage for its customers.
Listed on the Main Board of the Singapore Exchange, Stratech is headquartered in Singapore and targets markets in Asia, the Middle East, Australia, Europe, North and South America.
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