In accordance with listing rule 4.3A PocketMail provides its preliminary financial report for the 12 months ended 30 June 2003. These results are based on accounts that are in the process of being audited by our auditors, KPMG.
Financial Results
Despite a downturn in the United States economy the consolidated entity has maintained its revenues. Revenue from ordinary activities for the period was $10.3 million, (2002 $10.6 million) a small (2%) reduction.
Revenue from ordinary activities included an amount of $0.16 million representing the forgiveness, by an unrelated creditor, of previously disputed liabilities.
Successful restructuring of operations reduced total expenses by 35%. This contributed to a significantly improved net operating loss of $0.7 million (2002: loss of $6.7 million) a 90% reduction.
There were no significant non-owner transaction changes in equity during the period, consequently net loss attributable to members was $0.7 million (2002: net loss $6.6 million) an improvement of 89%.
The consolidated entity also significantly improved earnings before tax, amortisation and depreciation (EBITDA) achieving a positive result of $0.8 million. This compares to an EBITDA negative result of $3.7 million in the previous financial period.
The directors do not propose to pay a dividend for the period.
Technology Development
In February 2003, the company announced that it had implemented new global networking technology so that it could service all worldwide customers from a single Network Operations Centre ("NOC") in the US.
This allowed it to close it’s NOC in Sydney, rationalize Australian based technical staff, relocate to cheaper premises, and reduce overall costs. All this was completed during the June quarter.
Besides reducing ongoing operating costs, the new networking technology allows the company to introduce the PocketMail service to new geographic markets quickly and without the need for significant capital expenditure.
It has also enabled the expansion of local PocketMail access to certain overseas countries so that, for example, an Australian customer can now travel to North America and access there PocketMail mobile e-mail through PocketMail’s North American toll-free numbers (International PocketMail access from any country in the world has always been available, but at international toll rates). This new service offering has been well received by the company’s existing customer base, and will create new opportunities.
The company continues to develop both product and service offerings, as well as the support systems and infrastructure on which the business relies. Examples of recent developments over the past few months include new anti-SPAM tools, longer message handling, additional WebMail features, enhanced customer service tools, improved security, and implementation of latest VPN (virtual private network) and VOIP (voice over internet protocol) technology between Australia and the United States.
Overseas Expansion
In May 2003, the company commissioned a European network to providel mobile e-mail access in 12 countries across Europe. Local access is now available in Austria, Belgium, Denmark, France, Germany, Ireland, Italy, the Netherlands, Spain, Sweden, Switzerland and the U.K. This adds to the existing local markets of USA, Canada and Australia.
The company is now working to establish distribution and expand sales in Europe, and expects PocketMail to be available in some European markets before Xmas 2003.
Whilst PocketMail has always offered local PocketMail access in Canada, it never distributed PocketMail nor marketed the service there. The company has now commissioned its Canadian network and from late September 2003, it will begin selling PocketMail through RadioShack Canada, the leading national electronics retailer in Canada (800 store locations coast to coast). This is an exciting opportunity. Radioshack Canada, with its Canada-Wide distribution and reputation for quality service and knowledgeable staff, makes for an ideal retail partner.
Outside of Europe, North America and Australasia, the company is pursuing licensing opportunities. At this time, it is the continent of Africa which is showing most promise.
US Sales
PocketMail has continued to focus on the key vertical markets of Recreational Vehicle ("RV") owners and truckers.
In the United States, there are over 7 million RVs on the road, and an estimated 30 million RV enthusiasts (source R.V.I.A.). In addition, there are over 20 million trucks on the road (source NATSO).
Whilst PocketMail is distributed in the United States through Camping World, the world's largest retail supplier of RV parts, supplies and accessories, the RV retail industry is fragmented with a large number of small and independent players.
The company is pleased that The Coast Distribution System Inc has recently added PocketMail to the line of products that it supplies to its 15,000 RV and marine customers through its 17 distribution centres located throughout the United States and Canada. This will significantly increase the retail availability of PocketMail within the RV and boating communities, but will take time to have impact.
The company is making slow but steady progress in getting retail distribution through the truck stop and travel plaza industry. This is a huge industry in the United States, with some 4,500 travel plazas and truck stops, averaging annual sales of US$7.8million each (source: NATSO). This is a crucial market for us to break into in order to reach our key trucking and RV demographics.
At the June 2003 International Truck Show in Las Vegas, PocketMail announced a partnership with The Internet Truckstop, the first and largest freight matching service on the Internet, to provide mobile load-matching services for North American truckers, without using a laptop or a PC.
Using a PocketMail, and their Internet Truckstop account, truckers can now quickly and easily search The Internet Truckstop's large database of truck loads. It typically takes less than a minute to interrogate the database and receive available loads on their PocketMail.
The company now expects to begin marketing this service in 2003 directly to the 300,000+ users of the Internet Truckstop. This continues its strategy of providing added value (and need) to customers and prospective customers over and above it’s core mobile e-mail service.
Our People
Since acquiring the Worldwide PocketMail business from Pocket.Com back in May 2001, the business has gone through some major restructuring and rationalization.
The total number of employees (including outsourced staff) has decreased from 57 at time of acquisition to 26 as at 30 June, 2003.
Our world-wide customer service is now provided in-house, and from Sydney, Australia. A smaller in-house customer service team is now delivering a higher grade of service over longer opening hours, and more cost effectively than before.
Summary
The company continues to make steady progress throughout the business. Our goal now is sustainable and increased profitability through revenue growth.
PocketMail Group Limited (ASX:PKT) is a leading provider of value-priced, world-wide mobile e-mail services. The company's services are available locally throughout the United States, Canada, Western Europe and Australia, and internationally from every other country in the world. PocketMail has operations in Sydney, Australia in addition to its US operations in San Jose, California. For more information about PocketMail and its mobile e-mail services, please visit www.pocketmail.com
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