WDT - Wellington Drive Technologies

[Anna Naum]

Higher than normal volume over the week and an increasing price........interesting

[duncan macgregor]

WHOOPEE, One of my doggy shares is coming to life. I was In third place picking this as my first selection last year in the bad share competition. It might be the last death kicks before it kicks out. macdunk

[Anna Naum]

Or like a lot of things, you could be wrong

[kiwi_on_OE]

One can't complain too much about the 20%+ gain from this share in the last few weeks.

[huds]

Anna, theres a couple of threads already on WDT outling the company. I don't think starting a new one is fooling anyone... woof woof

[xpress]

Well I applied for an extra 200,000 shares! Don't fancy my chances of getting them but worth a crack anyway. I'm hoping that there were heaps of overseas holders that couldn't apply.

[duncan macgregor]

HUDS, The reason that anna created the new thread was to disguise the rubbish that they wrote on the other thread. If you read the WDT threads from start to finish you will see that the same people have been averaging down still bleating the same message. By starting a new thread we might not notice how stupid they were on the other thread. It makes good reading for new investors. macdunk

[Anna Naum]

Actually I started the new thread because I was sick of reading all the rubbish about this company from people and wanted to point out that the price and volumes were both up, nothing more. Also I note that the rights issue was oversubscribed by 130 odd %.

[xpress]

I think they were over subscribed by 30%.

"The issue has closed with entitlements and applications for oversubscriptions
totaling approximately 130% of the maximum shares on offer "

[Anna Naum]

Maths never was my best subject!

[Jac]

Thommo (a doctor of maths)has recently sold his "home" for a rumoured $8.75m

[PGL]

MacDunk can say what he wants about this company But you have to give the company credit for this - A NZ company selling manufactured goods under licence into the Chinese Market.

Re: Order Received and Manufacturing/Sales Agreement Reached

Ugur Refrigeration (Turkey) has placed an additional order for 32,000 AirMoVent commercial refrigeration motors, covering their requirements for March 2006. It is expected that orders for AirMoVent motors from Ugur will continue to be received regularly and that they will also begin to purchase Wellington's high efficiency ECR motors in due course.

Agreement has also been reached with Changzou Match-Well Electrical Products Company ("Match-Well") of China. Under the agreement, Match-Well obtains rights to manufacture and sell Wellington's new ECR81 motor to customers for commercial refrigeration and other products in the Peoples' Republic of China, and supplies motors to Wellington. Electronics and software for all ECR81 motors, including those sold in China, are supplied to Match-Well by Wellington.

Match-Well (www.match-well.com) is an established manufacturer of conventional AC motors and other products. They have identified strong demand in China for motors with high efficiency, due to the current shortages of electricity there.

[duncan macgregor]

PGL, That is what is good about a forum like this it gives us a wide range of view points to consider in making our investment decisions. Its your money involved not mine, which makes it that you have to be right mine is only an opinion. macdunk

[PGL]

Duncan, your opinion is as good as anyone's and you have every right to it IMHO

It just occurred to me that this particular news release would give you pause for thought.

You have told us that we shouldn't invest in NZ manufacturing companies because the Chinese would be more competetive at this (so no FPA for you - fair enough I say)

You have also told us not to invest in WDT because the chinese will steal the patents and out-compete for the same product (also it seems, the MD "gets paid too much" whatever that means)

So what do you think of the fact that WDT can sell their technology into the Chinese market and clip the ticket on the way through? - I think that this is pretty cool.

Cool (and clever, you would have to admit) because the Chinese manufacturer that has sole distribution rights in China will know,and will be able to enforce (in a way that no western company could ever hope to) how to prevent its rights from being ripped off by the Chinese.

Did you notice how low the volume of rights trading in WDT was - barely 1% of shareholders chose to sell their rights, choosing instead to stump up with the extra cash - are they all fools in your opinion?

[duncan macgregor]

PGL, Good to see rational debate for a change on the forum. Nobody is ever right all the time, so we must expect to get it wrong sometimes. When i get it wrong it costs me up to the time it hits my stop loss then I get out regardless of how right I might feel. All good investors never buy in a downtrend, WDT is in a downtrend. All smart investors have a stop loss, WDT hit every stop loss in the book. To trigger the enthusiasm of the gullable come up with a new product, then exploit them for all they are worth. That is the reason that I selected WDT and CER in the bad share competition and was third. The chinese dont recognise patents like we do. The kid next door has a chinese buggy with a motor that is an exact replica of a honda with no names or numbers. Honda parts can be fitted. Remember the old austin engine in the sixties, Datson made a car with the the exact same motor which was just another nail in Austins coffin. WDT have created huge losses for their shareholders, promised the earth and delivered very little. I really would be very surprised if they ever show a profit I think as an investor who cares better prospects else where. macdunk

[kiwi_on_OE]

If you factor in the rights issue then WDT appear to have been in an uptrend since early Nov, hence my earlier comment about a 20% gain since then. Perhaps a TA expert can comment. My even earlier comment on another thread about it dropping after the rights issue could also be about to come true, as the price does seem to have stalled recently.

Although I haven't seen an announcement, it appears as though extra shares of about 8% of the rights were available to those that applied e.g. pre-issue holding of 4000, rights of 1000, extras ~80.

[ekman]

6.0 mil loss, new order of 400.000 units and more to come. When will wdt become profitable

[Codfish]

A quote from WDT's Media Release today puts their latest order for 400,000 motors in perspective.

"The Company delivered in excess of 350,000 motors in the 12 months to end June 2007, a 75% increase on prior year. We have now shipped over 700,000
motors in aggregate, and we expect to ship our millionth motor during the
2007 calendar year."

So, this one order, assuming it is completed, comprises 36% of WDT's total output up to June 2007.

There was also a "Total Integration" order form another US company for "a common appliance that is used in many households, offices and light commercial premises in the United States and worldwide." Confidentiality cloaks this order in secrecy but it sounds like air conditioning or air extraction.

Quite a big jump in production due this year then. A good start but can they deliver? If they can, the numbers should make more interesting reading next year.

This bottom feeder is fat and happy to hold.

[Lizard]

Previous thread can be viewed here (http://www.snitzforum.sharetrader.co.nz/topic.asp?TOPIC_ID=18868&whichpage=23), since it doesn't seem to have made it across.

I'd like to repeat my earlier note here - that my rough calcs suggest they need to be selling 10m units per year within 3-4 years to be worth current price and would have to do this without raising any new capital.

Of course that's just the long term view. Sentiment can take it anywhere between now and then.

[Phaedrus]

I think it is pretty clear where sentiment is taking WDT, Liz.
Short-term, medium-term, long-term, makes little difference.

It appears that the market agrees with your valuation.
http://h1.ripway.com/Phaedrus/WDT830.gif

[Nevl]

I am actually going to get back in to WDT. I know Phadreaus and I have disagreed about this for many years and he is usually right but the momentum is building on the sales front and in I think this may be a good time to buy. Market sentiment is down and I am able to move in. Will invest some MHI profits here. Point taken about needing to sell 10mill units to justify shareprice but that is about 3 orders from 3 decent size manufactures and could happen in the next 2 years. One is on the cards and once one does then everyone has too. You will be bleeding market share if your fridge and washing machine are 3 times as expensive to run but cost the same.

[Phaedrus]

If you have decided that you really do want to buy WDT, Nevl, now could be a good time. Why? Because WDT is just above the previous support level of 30 cents. (Support is often found at round figures) Technically this would be classed as a low-risk entry point.
The usual practice here would be to have a strict Stoploss in place at say 28 - 29 cents. A Close below this would trigger an exit and you would have lost only a small amount should the current downtrend continue. Hence the "low" risk.
A trend-follower would wait for an uptrend before buying. This would take a Close of above 36 cents. Each to his own eh?

[peterb]

if anything was going to signal a change in fortune something like this would be it. THe volumes Lizard suggested to be neccesary for current value to be justified are astounding: still maybe its a share just gone from total dog to not-so-awful?

[Lizard]

Actually, price has fallen away from 40cps (equivalent pre-rights) to 31cps since I wrote that original post. I also assumed an investor would want a return of at least 25% pa over 4 years to be bothered investing right now. So it's not as bad as it looks - though I'd be surprised if they can get there without raising new capital!

If it helps, $30 revenue/unit, 10m units, $300m/yr revenue, price/sales=1 (this is based on typical mid-cycle manufacturing and currently compares favourably with companies like FPA or SKL - however, optimists might like to pick higher!), $300m market cap in 4 years time or $1/share - so 25%pa off a price of around 40cps. At 31cps, you can drop the figure down to sales of about 8m units per year in 4 years time.

Sometimes it is the point where a company starts to achieve real commercial viability where the investment dream fails for a while. Reality bites and the market becomes impatient for profits, while a company raises unexpectedly large amounts of new equity to fund working capital. This is where sentiment has a huge bearing on fundamentals, as the lower the share price goes, the more dilution existing shareholders get hit with... somewhat circular. A few good companies with savvy management are able to handle this stage very well and build confidence at the right time. Most struggle. Picking the right time to buy in for the confidence surge when investors regain their faith is not easy - especially in NZ where more than likely Fisher Funds or private equity will be standing by to take a major stake at the semi-final (cheapest) placement.

[KiwiBear]

I remember a few years back people justifying how an Ashburton meat coy was doing well and throwing good money after bad.
Then when they were in the big downtrend, work collegues jumped in to buy so called bargains @ 15c only to see them furthur decline to 5c then more people jumped in for greed justifying to themselves "it can't go much lower their still producing top quality export meat"!
After being burnt by the Jones, Judges, Hawkins, etc after the 87 crash and the Later IT capital & RMG, by brokers recommendations
of bottom end bargains! Well the rest is history, but a lesson well learnt!!!
I have to concurr with my fellow TA man Phaedrus, wait for the uptrend for confirmation, as a knife falls faster than a balloon with good news rises!

[Codfish]

WDT is up 19% today. Would experienced investors view this as a sell opportunity in the expectaton of picking up the shares again at a more "realistic" level later?

[Nigel]

Closed at 37c. Phaedrus - what do you make of this, given that you suggested earlier that a close of 36c could be significant? Thoughts appreciated.

[zigzag]

You could call WDT speculative, but you most certainly could not call it a dog. You could say it was expensive, but who knows, that is afterall just a matter of opinion. There does seem to be plenty of investors willing to pay well north of 30c. Me, I think this is a great little Kiwi company that is just starting to wind-up. Zigzag is willing to give it a go!

[Ttops]

Phaedrus. I think your chart needs correcting for the rights issue. Sudden drop from 51 to 39c in May corresponds to this issue. See below. Might make it look more of a sideways trend. since then

I have halved my exposure to WDT mainly due to the current climate taking your "caution advice" as I was too exposed to the NZ market but still believe in the long term principle that motors that save electricity are worth a punt. Will hold the remaining 50% and top up when WDT starts trending up.

Quotation Notice Renounceable Rights (WDTRE)

Further Quotation
Company Name: Wellington Drive Technologies Limited
Prospectus Dated: Proposed to be registered with the registrar of
companies on 17 May
Details of Security to be Quoted: One for Three Renounceable Rights
Issue of up to 76,520,232 Ordinary Shares at NZ 10 cents each
Ratio: 1:3
Issue Price: $0.10 per Ordinary Share
Payable: Payable in full upon application
Dividend Ranking: Pari passu with existing Ordinary Shares
Record Date 5 pm: 18 May 2007
Commence Quoting Rights and Existing ordinary shares quoted "ex-rights" on
the NZX 21 May 2007

Hold ADY FPH NZO WDT LYC TPW NWF KFLWA

[Phaedrus]

Thanks for that Treetops. It is painfully obvious that WDT is not a stock that I follow! Here is the corrected chart :-

http://h1.ripway.com/Phaedrus/WDT831.gif

[glennj]

You could call WDT speculative, but you most certainly could not call it a dog. You could say it was expensive, but who knows, that is afterall just a matter of opinion. There does seem to be plenty of investors willing to pay well north of 30c. Me, I think this is a great little Kiwi company that is just starting to wind-up. Zigzag is willing to give it a go!

I'm prepared to call it a dog because that is how it has performed. I've watched it quite closely since Jan 2005 & done some research. Result is I didn't buy. If I had bought and then sold rather than taken up the rights issues my annualised return would have been minus 13.5%
Maybe it won't be a dog sometime in the future? Currently it is speculative as you state. Looking from a fundy viewpoint they are making little progress. I'll keep watching and may climb aboard when/if profitability, margins, ps ratios etc show that there is more than hype there.

[Phaedrus]

Closed at 37c. Phaedrus - what do you make of this, given that you suggested earlier that a close of 36c could be significant? Thoughts appreciated.
Nigel, I don't know what I was talking about. WDT has essentially been going sideways in a trading range all this year (plus last year, really). There is little point in looking for, or commenting on, trends lying within this trading range. If you have made an entry just above a recent support level, you have done as much as you can to profit from this stock.

[Ttops]

Not to worry Phaedrus Your efforts are much appreciated as always. WDT attracted me because I have a tendency to let Green concepts sway me like saving electricity. In the water crisis back in 92 30s showers were achieved in our household! Anyway I can't see electricity getting cheaper and the shift to "green" might just make me a profit with WDT one day. I'm also stoically an NZ supporter and can't resist backing NZ companies with something special if the price is right. Appreciate your comments
glennj and can't help but agree its a dog looking at the charts but you obviously see potential or you wouldn't track it. I wonder if I'll see a profit as some overseas manufacturer will see this and snap it up before it reaches critical mass.

[craic]

I would go a stage further than SectorSurfa and say that WDT have a policy of pushing misinformation to the media in the form of "breakthroughs" that invariably turn into fizzers. Our HB Today carried a story of quite a few inches about a breakthrough that was exactly the same message that they have been flogging for years - since Strathmore dumped the company on its shareholders nearly seven years ago. It ran up around 70cps for a time then.

[Ttops]

:p Every dog has its day.

[kiwi_on_OE]

Phaedrus, did you adjust your graph for the cash issue in Nov 05? I suspect not. 1:4, I think it may have been at 10c, but I'm not sure.

Glennj, going back to your example, presumably you wouldn't have bought in Jan 05 when it started a down trend. If you'd instead bought in late 05 when it got into an uptrend you'd now be sitting on a gain of about 50% if you were still holding. You may have even bailed a year ago for the same gain.

[Phaedrus]

Thanks KoOE, not another one! I have made the 4 cent correction and here is the amended chart. Not much different, but worth fixing eh?
http://h1.ripway.com/Phaedrus/WDT910.gif

[craic]

Once again this dog brings home a bone to the press assn or whoever and they pat his head and show everyone the bone! Last nights HB Today has quarter of a page and a large photograph devoted to the company and their breakthrough into the US market and the huge increase in production that will be needed etc. Surely this is fraud or dishonesty of one sort or another?

[Capitalist]

Hi Belgarion :)

No, I'm not holding at the moment. Still keeping an eye on this one though - pleased to see quite a few people are still very positive about it.

[Codfish]

Last nights HB Today has quarter of a page and a large photograph devoted to the company and their breakthrough into the US market and the huge increase in production that will be needed etc. Surely this is fraud or dishonesty of one sort or another?

How is this "fraud or dishonesty? Of course Ross Green is going to publicise what he sees as a major breakthrough for WDT. Isn't that part of his job? Their recent capital raising was set at 10c, around a quarter of the then SP. Normally companies milk their shareholders when the SP is high. Is it odd that WDT didn't? Maybe, but is it fraud or dishonesty? I think not.

[zigzag]

What is your problem craic? Are you still carrying baggage from the 80's? We are talking about Wellington Drive, not Strathmore. I have met Ross Green a number of times, and I have a very high opinion of him. He is an intelligent and capable CEO, and of the highest integrity. Since he took over the reins, WDT has gone from strength to strength. Your suggestions of fraud and dishonesty are totally absurd and downright laughable!

[craic]

Then why has it taken 7 years to reduce the value of the shares by 50%? When will they make a profit? How much has Ross Green drawn in salary over that period? What has he delivered to the Shareholders in that time except for a string of promises? Gone from strenght to strength? - look at the graph for the past few years.

[Codfish]

I get it now, you have a basic misunderstanding of the fuction of capital markets. They do not exist to make you and I money. Rather they are an efficient means of uniting those in need of capital with those who have it to provide, at acceptable terms for both.

It's about development and progress really, not profit. Without the profit bit it wouldn't work, of course, but hey, every system has it's flaws ;).

If you want to make money now, you'd better stick to companies that have passed the development stage and are making profits rather than demands on shareholders for more capital. You'll have to pay ten times as much though, and still there's a risk of losing everything.

[Ttops]

WDT seems well supported "for a dog" at 37c. Possibly some buyers see some advantage in a "miserly motor" given Helen seems set to announce her scheme on Thursday which inevitably will raise power prices. Turnover not bad for an NZX dog on its last woof eh SectorSurfa. Steady buying over the last week makes me wonder if something is in the wind and the dog has caught a wiff.

[Ttops]

yeah haven't you noticed dogs like sniffing you know where...

perhaps this is the "wiff" you are speaking of

The biological "drive" mmm...Some dogs have a good time ;)

[Codfish]

More orders for Wellington.

http://www.findata.co.nz/Markets/Announcement.aspx?e=NZX&n=154066

First time orders from Korea & Finland, and a repeat order from Japan. All in the one notice.

Are they starting to play down the good news so as not to ramp the share price?

[Ttops]

I really can't understand the interest in this puppy. From 30 to 40 in no time at all. Can't be the favourable exchange rate. Who is buying up. Fisher? Someone is buying this puppy but who?

[Codfish]

Of course the Wellington Drive of ilk is driving remorsely into the hinterlands of continents far from their humble origins.

Garnering remorseless orders for their remorseless fans.

I am surprised their price is only on Cloud 8.

Look again:D

[ekman]

The dog is yapping again

[Codfish]

What I particularly like is that Panasonic will be paying for the engineering work.

https://www.directbroking.co.nz/DirectTrade/dynamic/announcement.aspx?id=1725676

I was concerned that WDT's 'bespoke' approach with these 'Total integration' motors would mean high up front costs combined with market pressure to keep unit prices down.

[Scuffer]

Starting to sound like they could be a buy,everyone is looking for lower costs electrically I suppose it will be so there is more cheap electric to charge our electric cars when the oil runs out or gets too expensive

[kiwi_on_OE]

I'm not complaining about the share price doubling over last two years.

[Scuffer]

This dog has become a buy, a lot of people are asking how much is that doggy in the window, wait until the big boys start to move in which will be quite soon I expect.WDT are starting to raise eyebrows and doggy tails are starting to wag.

[Scuffer]

I know but I've got a few so its even more appropriate

[Nevl]

Cool news. This really puts the WDT price on a stable footing and the prospect of selling 10mill units a year with a couple $ margin on each unit means that a profit of 20Mill is not out of the question especially if the US manufacture they are talking too comes on board with a similar deal. Given the hints Ross has dropped over the last 8 months 2009 could be a nice year. Even if they just have Panasonic and the Samsung deal this without any other customer WDT is looking cheap at this price and thats ingnoring any other clients or potential clients!! The other plus is Panasonic will do the manufacturing meaning that WDT just takes the license fees. Well a happy holder again!! Just need that US appliance manufacturer to sign up and we are off.

[Scuffer]

Someone with some spare cash is buying up large, a bit of a surprise considering WDT has been classed as a worthless mutt by a few on this thread may be its these people who are now buying in.

[Lizard]

As I per my earlier post, I think 8m motors per year within 3-4 years justifies 30cps. 10m justifies 40cps. Starting to look like a realistic possibility, so I think the buying interest might finally make sense.

[Nevl]

hopefully they will use the revenue to develop new motors. I would like to see what WDT motors could do for the electric car. A lighter engine using less power could work well in hybrids and totally electric as well as be a lot more expensive than their present motors giving a good boost to revenue. Any profits for the next 5 years should be used in RnD and not given paid out in Divis. I hope they understand that. I am worried they will be happy being a niche operator and will sell out to the big boys too soon. The source Vortex deal was an example of that. They now have marquee names as customers with Samsung, Panasonic, Sanyo and Walmart as customers. No need to go to dodgy venture capatialists for credability now.Looking forward to holding these shares for the long term.

Lets see some real ambition as they have a healthy balance sheet now and strong revenues over the next few years.

[Lizard]

I can't figure the profit margin. I can just take a reasonable guess based on the nature of the business etc. At this stage of a business, it can only ever be ballpark maths.

[Lizard]

Columbus, excuse me if I'm wrong, but I suspect you're just taking the piss. Fair enough. Numbers are just a drifting point on the horizon which give me a sense of direction, but sentiment makes for a crooked route.

I post numbers on forums because they're easier for me to refer to than all my scraps of paper. If they work at all, it's because every institutional buyer or seller will be basing their decisions on figures generated by an analyst who had to guess a set of numbers and who was not an expert in electric motors. Not surprisingly, they tend to make similar sets of assumptions (and errors).

[zigzag]

It is a pedigree mutt..which is now being acknowledged, perforce, by pussies.

What is your problem Columbus? Craic seemed to be a prisoner of the 1980's. You gone on and on about dogs and mutts. You seem to have some weird canine fixation/fetish. I really think you should see someone about it. Even when confronted by a by a tiger, you still see a dog. It's becoming increasingly obvious that you are barking up the wrong tree. Get some professional help!

[Lizard]

No, I have not said that it "would not become profitable". I have said that it would not be worth paying up for the market capitalisation attributed to it unless it was able to achieve sales of that magnitude within 3-4 years. I don't see that as incompatible with what Ross Green has said.

From my post of 30 August:
If it helps, $30 revenue/unit, 10m units, $300m/yr revenue, price/sales=1 (this is based on typical mid-cycle manufacturing and currently compares favourably with companies like FPA or SKL - however, optimists might like to pick higher!), $300m market cap in 4 years time or $1/share - so 25%pa off a price of around 40cps. At 31cps, you can drop the figure down to sales of about 8m units per year in 4 years time.

That may be simple (and I've presented the workings back-to-front), but I am happy with that level of calculation at this point in time. You are welcome to examine the numbers and draw your own conclusions as to whether they are fair or not.

My estimates may turn out to be "millions" out. But the posts of some people earlier suggested they were willing to buy on the prospect of sales which were an entire order of magnitude out.

[Codfish]

Hey guys stop bickering. I have wondered where Lizard gets his numbers from but since I'm not prepared to do the numbers myself I've no basis for criticism.

There is a very long way to go before we can talk about profitability, dividends etc with WDT. They have yet to build their millionth motor never mind 8-10m per year. They are still an intellectual property company really, and are yet to prove themselves able to manufacturer milions of motors each year consistently and efficiently.

WDT may well fulfill it's promise and resist the temptation to sell out to the big boys in to the bargain. I'd be very happy if they did. For now, though, it's looking good but there is still a long way to go.

[Nevl]

codfish you are right about the dividends but I mentioned it as it seems to be the first priority for any Kiwi company making a profit rather than reinvestment. Also Panasonic according to the news release to the NZ herald is going to manufacture the motors at the new Singapore plant. WDT is outsourcing virtually all its production so upscaling production is relativly simple. That was the whole point of the last 2 capitial raisings. Getting to a stage where WDT acts as an intelectual property company with a small production facility to do small runs of the engines. The sad thing is most of the sales are for the monsoon engine and not the more advanced engines but still the price still seems to be around the $35 per engine. This is good news as the new engines seem to be cheaper than the old style electric motors hopefully hastening the uptake. Ross Green also prdicted profits from the 2nd half of 2008. i suspect the payments from Panasonic will be a big part of this as well as the Total integration project for the American company. The 400000 order announced last week will not hurt either.

[bonito]

A write up / summary of recent WDT activities from the weekend for those who missed it.

Motor co gets a rev up
By JENNY RUTH - Sunday Star Times | Sunday, 21 October 2007

A string of new orders over the past few months, particularly from household names Panasonic and Samsung, has significantly boosted Wellington Drive Technologies' credibility.

The fact that such companies have allowed their names to be published is significant in itself and likely to generate further interest in the company's energy efficient motors used in all sorts of household appliances, from fridges to air conditioners.

In the past, the company has been unable to name its customers back in late August, it announced an order for 400,000 motors from "a major North American manufacturer of commercial refrigeration equipment".

To put that in context, at the end of June, the company had shipped a total of just 700,000 motors it was founded in 1986 but has been producing commercial products only in the past few years.

Illustrating how much production is now ramping up, so far, in the year ended June, Wellington already delivered more than half that total and expects to deliver its millionth motor some time in 2007.

That unnamed US customer will start receiving motors in January next year and Wellington says that customer expects it will need more than 400,000 a year in future as it plans to introduce the motors into other product lines.

While that order will hit the company's bottom line long before Panasonic's order, which is still at the development stage, it was the naming of Panasonic that really got the company's share price moving.

Wellington has been able to name some customers in the past, although they haven't been household names in New Zealand. These include US supermarket operator Kroger and Turkish appliances manufacturer Arcelik Europe's third-largest appliances manufacturer.

"As one credible party contracts with us, other credible parties see that as a tick," says Wellington chairman Shawn Beck. "It's getting to feel a bit more like a snowball rolling down the hill."

Being unable to name customers has been "a pain in the proverbial", but customers wanted to be careful about their marketing strategies and hadn't wanted to give their competitors advance warning of new products, he says.

But it is getting easier and customers are more willing to be named. "Given that it's fairly obvious that energy efficiency is coming, they're not quite so paranoid," Beck says.

As to that energy efficiency, Wellington says the energy savings from that 400,000 order is equivalent to reducing carbon emissions by at least 100,000 tonnes and will have about the same effect as taking 50,000 cars off the road.

The new orders are also making the company's forecast that it will become profitable by the second half of calendar 2008 look more achievable. It has been a profit-free zone all its existence so far, accumulating $34.2 million in losses to June 30.

Gaining credibility is always important for a start-up company and Wellington's was severely dented late last year when a $40m deal to sell 40% to US investors fell over when those investors couldn't stump up with the cash at the last moment.

Unlike many start-ups, Wellington doesn't lack institutional support: it counts Axa, ACC, ING and Walker Capital Management among its shareholders.

Some individuals have also been willing to put their money where their mouths are, including Goldman Sachs JB Were broker Grant Taylor, who owns nearly seven million shares.

Taylor says that despite the fiasco of the US deal, its failure turned out to be a galvanising event expecting to receive the money, Wellington had already started to spend it to speed up its commercialisation process. Rather than just raising enough money to keep going at a snail's pace, as Wellington had in the past, "what it caused the company to do was say, are we going to go for gold?" he says.

The answer was yes; the company placed $12m with six institutions the same day it announced the US deal's failure and raised a further $7.65m from a rights issue this year.

If it does move into profit next year, that could be the last time the company needs to hold its hand out for more money.

Although it's always possible that, having proved itself over the next year or so, Wellington Drive Technologies may decide to speed up development even further.

# Jenny Ruth is a freelance financial journalist and a columnist for the Independent Financial Review.

[Scuffer]

This the key with the prices of oil and coal going skywards and the whole carbon credit thing the most efficient motors are the motors which are going to be utilised where ever possible. Another key factor is that by being more efficient they are lighter which means less use of copper and steel, which are resources that are also heading up in price.
The average electric motor states its power factor on its name plate usually around 0.85 so any improvement on power lost is money saved, I don't know what the p.f. of the average WDT motor is but it will be difficult to get it up much more so if they have managed to do this then they will be very much sort after and now that major companies are showing interest and opening their wallets I fully expect the sp to go up dramatically soon.

[upside_umop]

This the key with the prices of oil and coal going skywards and the whole carbon credit thing the most efficient motors are the motors which are going to be utilised where ever possible. Another key factor is that by being more efficient they are lighter which means less use of copper and steel, which are resources that are also heading up in price.
The average electric motor states its power factor on its name plate usually around 0.85 so any improvement on power lost is money saved, I don't know what the p.f. of the average WDT motor is but it will be difficult to get it up much more so if they have managed to do this then they will be very much sort after and now that major companies are showing interest and opening their wallets I fully expect the sp to go up dramatically soon.

really depends which motors your looking at scuffer.
have a read of some wdt reports on motor efficency and which markets their targeting, or even google it. mainly in low power air conditioning, refridgerators etc..
the basic gist is, that wdt are targeting the efficent motor market less than 1 hp equivalent. you say the average motor is 0.85 and hard to improve on. i think wdt is competing in market where the motors are lower power ( <1kw ) and when 'average' or 'normal' motors are in this range, they become highly inefficient. wdts motors however are one of the most efficient making them very attractive.

here is a page with a little table which show efficiencies of motors improving with more power. you will then get where wdt a positioning themselves...

http://www.psnh.com/Business/SmallBusiness/Motor.asp

about the shareprice rising dramatically? its already got a reasonably large market cap for a company not yet turning a profit. no doubt they are also experiencing a very tough market with the nzd so high...
i guess its all about your required/expected rate of return...

[Scuffer]

Interesting I didn't know that thanks upside.

[SMan]

Does anyone have any pricing/cost info for wdt units? A saving of US$40M per year for 400,000 units equates to US$100 per unit per year. A 350W unit running 24/7 will consume roughly 3000kWh of electricity per year. So a $100 saving on only 3000kWh must represent a significant increase in efficiency and I can see the attraction of these units to the end retailer.

[ratkin]

Looking through their last report they seemed rather worried about the kiwi dollar being too high. Fact is it probably not going any lower for quite sometime .

[SMan]

Looking through their last report they seemed rather worried about the kiwi dollar being too high. Fact is it probably not going any lower for quite sometime .

Ratkin I agree the US dollar is not looking to recover anytime soon, however, WDT have indicated their intentions to expand within the european markets with several sales reps recruited for this task. I suspect the NZ dollar will weaken against this market providing some gains to offset the reduced US market profitability. Some of their first international sales have been to european/asian based companies...

[upside_umop]

they will still make a loss this year, so no profit as it would be said.
looking good though, i like the potential but will the shareprice move north at a good rate in the future?

if it gets more orders in timely fashion it should do well.

[bermuda]

Incredible hold for a share the number crunchers hate.

I thought I might add a little snippet bearing in mind that Ray Meyer is on the Board.

This is the same Ray Meyer who is on the Board of NZOG. And someone who was at the NZOG AGM had the gall to say he was all hogwash.

A very very talented and wise man.

[upside_umop]

Incredible hold for a share the number crunchers hate.


Tell me what you expect from this stock in terms of revenue, profit, shareprice in the future.

Lizard? has given guidelines to what he thinks profit should be in the future to justfy a company with a market cap of over 150mill.

They havent had revenue break 5 million a year, they compete in what will be a very competitve market, profit unfortunately has never been spoken from the lips of the CEO or chairman. They shareprice was 60 cents 3 years ago, options have been handed out mind you...but still nothing exceptional.

Im not doubting this stock, but it will be consistently hard work for the company.

Your of view on how you see it unfolding welcome, or anyone else for that matter.

[emearg]

They havent had revenue break 5 million a year

Revenue for the year ended 30 June 2007 was 10.6 million up 60% on the previous year.

[upside_umop]

Revenue for the year ended 30 June 2007 was 10.6 million up 60% on the previous year.

Teaches me to do my research, I did see they were in the Top 50 thing the other day, but it didnt state there what their revenue was in the paper.

A pity that Colombus couldnt point that out to me earlier, I'm guessing he is a current shareholder? Colombus, please disclose and dont leave little riddles - you seem to do a bit of that on this thread...

Also, you going to disclose your figures for revenue, profit, and shareprice over the next 12 months?

[zigzag]

According to "Unlimited" magazine, WDT came in at no.18, with revenue growth of 400%.

[Nevl]

I think Ross Green has stated that he expects profit in the second half of next year. As to share price I expect it to remail in 45 to 50 cent mark for the forseeable future. However this is a announcement related share and the price will rice and fall according to sales announcements not any fundamentals.Still as I have stated before this company along with Rakon probally has the most potential over the next 5 to 7 years. A 1% market share in its field is $1bill in sales. That is small electric motors. Given the need to cut energy costs and the economics involved I think this is possible in 5 years. Whether it will be acheived thats another story.

This may be of interest to anyone. Even gives figures for the US market

http://findarticles.com/p/articles/mi_m1094/is_2_35/ai_63607835/pg_1

[Codfish]

Soon they will have bagged more orders since the rights issue than they have sold in total before it. :D

[Codfish]

Hill Pheonix are taking 180,000 units per year for starters. Impressive, yes, but it isn't all good news...

" Notwithstanding the solid revenue increase, the operating loss for the year increased from last year. This was partly a result of delays in finalizing contracts and partly a result of the Company's decision to accelerate its overall activity levels in order to capture as much of the market opportunity as realistically possible. Nevertheless, overheads have been well-managed and ended the year in line with the planned increase, with a doubling in offshore based infrastructure costs and New Zealand costs managed to less than a 20&#37; increase.

We also saw an adverse impact of $0.7 million, due to revaluation of US dollar denominated assets, namely cash and receivables. The appreciation in the New Zealand dollar also reduced our reported revenue growth, essentially all our sales being denominated in Euros and US dollars. As most of our stocks are also purchased in US dollars, we were hit twice by the New Zealand dollar appreciation. Recorded margin improvement was reduced, due to stocks being purchased earlier in the year at less favourable exchange rates than when major billings were made.

Although we would naturally prefer the Company's financial results to be better, the results have to be viewed against the stage of rapid growth the Company is in and the current volatility of exchange rates.

Cash balance at year end was about $13 million, reflecting the successful rights issue concluded in June and helped by a small reduction in working capital compared to the previous half year. However, working capital requirements will continue to show significant variances over the next few years as we deal with early growth of new customer accounts and the introduction of new product lines. We continue to expect that working capital will decline relative to sales levels over time, but in absolute terms we expect that working capital will rise and that investment in working capital will remain substantial for some time.

Your Board and senior management are currently considering some important decisions. On our current path, we are confident that the company can move into profitability in the second half of next calendar year. However, some
large opportunities are on offer. If properly exploited these could lead to rapid growth of volumes of both standard products and those developed specifically under Total Integration programs in 2009, 2010 and beyond: volumes that would be substantially higher than present expectations. Capitalizing on these opportunities, as always, has associated up-front costs and investment that would potentially delay the Company's transition to profitability. This, however, would be balanced by substantially greater upside in later years. Should we choose to make any material changes to our plans we will communicate these changes (and their associated financial outcomes) to shareholders at the time. "

I imagine some will take this a cue to exit the stock for a year or so. Another Capital Raising is in the offing or maybe a cornerstone shareholder. I'd prefer the former though it won't be 10c a share this time around!

They should stop pussyfooting around and go for all the money they need to do the job. Be bold WDT, go for gold and don't sell us all out to the first big player that comes along with "tomorrows price today" for us shareholders and six figure pension plans for all the directors!

CF

[ratkin]

They will be asking for more money soon

[Codfish]

A take-over, Codswallop?

How amusing.

Probably is Codswallop, I'm a bit paranoid after SOE. It's easier to buy a company than build one and NZ directors seem ready to take the cash.

[xpress]

This company has already been approached a couple of years ago about being taken over. The management said they weren't interested, and at that time management had a controlling stake. I certainly hope they are NOT taken over as I have been waiting patiently to get the benefit of all this investment in time amd money! I still think this is one of the best potential investments in our sharemarket at the moment. Go WDT!

[Codfish]

Well, I was wrong. If people are cashing up they are doing so at 50c :).

[SMan]

2.5 million traded. Curious.

Not really. This is very much an announcement linked stock at the moment. And what happened today... wow an announcement. Still small news and yet to break resistance.

[SMan]

No-one invests a million plus on one announcement.


Someone also SOLD 2.3M odd shares in one parcel.... Perhaps the buyer was just waiting until a suitable sized chunk was available without pushing up the price...

[Lizard]

Not sure about Ross Green's maths in the agm speech...

Ongoing sales growth of 150% per annum would mean selling 530 - 1300 million motor units by 2015 - 2016, not 30-40 million. :p

Though 150% for just the next 4 years (13.6m units) would be enough to meet my baseline for a worthwhile investment at current prices.

Recent announcements are increasingly making this investment proposition stack up for me. I have bought a small parcel and may look to add on any dips.

[emearg]

Hill Pheonix are taking 180,000 units per year for starters.

You got this figure based on the 500 per day quote? Do you know for sure that Hill Phoenix make their products (and therefore use WDT motors) 360 days of the year?

My calculations were done at a more conservative 5 days a week which comes out to 130,000 units per year which isn't too bad. This would provide revenue of approximately 4.5 million.

Hopefully in 2008 we will see another announcement that Hill have ordered more units since they have only ordered another 80,000 so far. Still, that is a good increase over the 50,000 ordered the previous year.

[emearg]

Hopefully in 2008 we will see another announcement that Hill have ordered more units since they have only ordered another 80,000 so far.

Actually they have only ordered 70,000 so far. Apologies for this error.

[Codfish]

You got this figure based on the 500 per day quote? Do you know for sure that Hill Phoenix make their products (and therefore use WDT motors) 360 days of the year?

Hopefully in 2008 we will see another announcement that Hill have ordered more units since they have only ordered another 80,000 so far. Still, that is a good increase over the 50,000 ordered the previous year.

Yep I'm sure that's how I read it. Can't say I'm moved to phone them up to find out exactly what they meant.

Another announcement, not Hill though. As usual they can't say who but it sounds big!

"The contracted value of the development and production engineering exceeds $NZ1.5 million with products being launched by the customer throughout 2008 and early 2009. Wellington expects product revenues from manufacturing to grow steadily from 2009 onwards in this long-term agreement. "

CF

[Lizard]

Yes, another impressive stride forward towards justifying the current market cap. :)

[emearg]

Here is a ShareChat article that has additional info on todays annoucement:

WDT signs $1.5m agreement

Wellington Drive Technologies said today it had signed a $1.5 million long-term contract to provide its efficient motors to an unnamed international company.

The company will launch the products containing the motors throughout this year and early 2009.

Manufacturing revenue was expected to grow from 2009 from the long-term agreement, WDT managing director Ross Green said.

"This agreement is significant as Wellington's technology will be in products available through an established, global sales organisation," Green said.

"These distribution channels should enable fast revenue growth as the products come available and accepted by end users."

WDT had signed a confidentiality agreement covering the name and other details of the company, to protect both parties' competitive positions, he said.

The company was not a household name, and not based in the United States, but was well-known in technical circles, Green said. It had approached WDT.

"The sort of products that they're dealing with are used everywhere, and essentially they're everywhere as well."

WDT had spent nine months on development work last year anticipating the contract completion, which would be recorded as revenue.

WDT is not greatly affected by the high New Zealand dollar as it produces mainly in China and Malaysia. The Auckland-based company was running at capacity, and was expanding so it had an adequate buffer.

"I think really what we're seeing is the fact that we've been out in the market with truly commercial products for a couple of years, and I think in hindsight we're going to say this is the year when the company began generating business on a truly commercial scale," he said.

[Codfish]

"Institutional placement of 31 million ordinary shares... At the agreed price of 41.5 cents per share, this raises just over $12.8m in new capital. After the transaction, UBS will own 9.2% of the shares on issue"

https://www.directbroking.co.nz/DirectTrade/dynamic/announcement.aspx?id=1839310

WDT's wish list...

"The new funds will be used to;
- Strengthen sales, marketing and in-market support within the sales organisation, primarily overseas;
- Improve the Company's ability to deliver products in volume rapidly,
including the establishment of a stator manufacturing facility in Singapore
and the implementation of systems and processes appropriate for high volume supply direct to leading appliance manufacturers in North America, Asia and Europe ("Tier 1" supply systems);
- Reduce the time taken to move new standard and special-purpose Total Integration designs from prototype to full production status
- Bring forward the next generation of research and development to
extend Wellington's innovation lead and to access new market areas. "

Not sure $13m will cover it, how much does it cost to build a small factory in Singapore? I like the ambition but expect the market to focus on the fact that 'break even' has now been pushed out another year.

[Nevl]

I like this I really would like to see them go for it. This piece meal approach though is fustrating and I would love to see them try to raise closer to 100mill in one go. Remove all doubt and be able to do what they want when they need too. Still having UBS on board is great especially in this investment climate. They are taking a punt on new technology in a falling market. If that is not a vote of confidence what is?

I will be topping up though out the next few years so in the end I will have WDT as my largest investment. I still think this share will be close to $2.00 about the end of 2010 and heading to $3.00 by 2012. I have already brought another 10000 this week.

[Codfish]

...I would love to see them try to raise closer to 100mill in one go. Remove all doubt and be able to do what they want when they need too.

This may not be the end of it. I imagine UBS weren't the only ones WDT have been talking to and no reason to beleive that all discussions have been concluded already. In fact I wonder why UBS didn't wait a few weeks given the current climate?

Capital Raising from us shareholders is now unlikely though IMO.

[ratkin]

They will be asking for more money soon

That didnt take long :)

[emearg]

Todays news means that over 190 million of the 337 million shares issued will be held by institutions. That is a pretty large chunk for a "start up" company isn't it?

[emearg]

That didnt take long :)

That is true. Isn't it also true that this is a good thing? Better than leaving it to the last minute and either having to slow down expansion or cause customers concern about the state of the balance sheet. Nothing like money in the bank to make customers comfortable about your tenure. That is one of the things the failed capital raising in 06 was meant to resolve wasn't it?

[Nevl]

I think this is a confirmation of the plan outlined at the AGM where they said they had a choice of Profits in 2008 or to keep investing in expanding the company for larger profits in 2010 and onwards.I am glad they have gone for this and will keep investing. The potential is too big just to go a short way down the road and then pull back just for small profits. We are in a go for broke situation and I think this is the right call. I think there will be another capital raising in the next few months. But there is probally going to be one more major announcement by june.

[emearg]

But there is probally going to be one more major announcement by june.

That is quite a specific comment. Why are you expecting only one announcement by June?

Considering their ever increasing sales team, the growing demand for EC motors at reasonable prices and the reducing times from first contact to an announcement of sales, first stage of or progress with a TI project can't we reasonably expect more than one announcement before June? Looking back over the past 12 months there was an announcement once a month on average of decent sized sales or new/progressing integration projects.

What ya think?

[Nevl]

I know I expect only one major announcement. They said there would be several at the agm and since then we have had a couple. Still it is just one major order that I expect ie more than 10000 motors per month. I would love to see more but am not that hopefull. Still the moves to raise more cash suggest that by year end some very substantial orders may arrive. Still i expect the first half of the year to be very quiet.

[Codfish]

It looks like ACC just bought 7m WDT at 38c to go over the 5% threshold.

Are there any NZ stocks which ACC don't hold?

[emearg]

It looks like ACC just bought 7m WDT at 38c to go over the 5% threshold.

Are there any NZ stocks which ACC don't hold?

Their SSH says they bought 4,229,595 yesterday.

Compared to the number they held on the 28th August 2006 they have increased their holding almost five-fold in less than 18 months.

Regarding your next point I would say they don't have shares in lots of NZ stocks. I would be interested in knowing how many other "startups" they hold to get an idea of their risk profile.

[craic]

Startup?? WDT is all of seven or more years old. I sold out before I retired over five years ago at around 50&#37; obove the current price.

[winner69]

Their SSH says they bought 4,229,595 yesterday.


Regarding your next point I would say they don't have shares in lots of NZ stocks. I would be interested in knowing how many other "startups" they hold to get an idea of their risk profile.

ACC is one of NZs biggest 'fund managers' with over $9billion to invest

Some $1.1 billion is in NZ equities ...... which means they probably have some shares in most stocks

They also have $57 million invested in NZ private equity - less tha 1% of funds under management

Need to be a very conservative investor .... so take afew punts but spread the money around. A large %age is invested in bonds

[emearg]

Startup?? WDT is all of seven or more years old. I sold out before I retired over five years ago at around 50% obove the current price.

I used the term startup in terms of where they are at in terms of commercialising their products rather than age. Perhaps I use the term incorrectly? Having said that Jenny Ruth in her article in October used the same term so at least I am in good company :-)

Moving on...does your 50% comment take into account all the rights issues since you sold?

Even after asking that last question I concur that you may be better off having sold them five years ago. Personally I have bought and sold WDT several times over the last year or three. Now though, I have bought with a view of holding long term.

The difference between five, three or two years ago is that they are now selling their EC motors in increasing volumes. Previously, their AirMovent line helped boost the number of motors they could say they had sold but it didn't impress me much. But now they are selling their EC motors I am rapidly becoming more impressed.

I am of the opinion that the market is now demanding products such as theirs, and that demand is growing rapidly. Their commentary says they have the advantage of being able to produce EC motors at competitive prices (given adequate volumes). It would appear this is something their competition isn't capable of.

As I see it their number one priority should be to become the dominant producer of FHP EC motors. Their focus on growing sales as rapidly as possible rather than continuing on at a snails pace is the right move. Profit isn't important in the short term as long as the financial backing continues, and it shows absolutely no sign of weakening. I am thinking that by the time they announce first half results they will have lost a total of approximately $40,000,000 since their inception. Considering where they have gotten to this would be considered milk money in most of the world's stock markets.

Time will tell of course, but given their growing backing by institutions I conclude I'm not the only one thinking this company is a good one to own a slice of.

[JMKC]

Their SSH says they bought 4,229,595 yesterday.

Compared to the number they held on the 28th August 2006 they have increased their holding almost five-fold in less than 18 months.

Regarding your next point I would say they don't have shares in lots of NZ stocks. I would be interested in knowing how many other "startups" they hold to get an idea of their risk profile.

The ACC hold positions in nearly all coys listed on the NZX. Both large and small caps.

[mondograss]

Quite a healthy turnover today (1.5m). Is there an announcement due or something?

[Nevl]

not a bad report though of course the market didn't like it. Still 5 total integration projects to be confirmed over the next year which is great. Lets say 1mill units each add another mill for the other customers there could be 6 mill units a year by 2010. Given a price of around $20 a unit that is $120mill per year. Would like some price confirmation from WDT but I think it is not too far gone when comparing revenue with announced sales. Could be more than 6mill units as well so looking forward to 2009. Nothing I read would convince me to stop my accumulation over the next 12 months.

[emearg]

The presentation released today titled "Saving Generation for the Next Generation" didn't contain a lot of new information for anyone who have been following this company and the slow but inevitable trend towards developing ways to waste less electricity rather than just building more power plants to power inefficient products

One point I found interesting is that they are planning on taking their sales team from 20 in December 2007 to a planned 80 by December 2009. Considering how much the original small team (which were much fewer than 20 until quite recently) have achieved with sales and engineering contracts one can only wonder how much a team of 80 can achieve? Clearly the market place is becoming more ready by the day for products of this nature, and WDT have a competitive advantage with the size, weight, quietness, cost and potentially most importantly the fact they can tailor their products to a customers needs. That last point is completely unheard of in this industry.

What is uncertain is will WDT be able to keep up with the demand (they claim they are structuring production and distribution to be very scalable) and much more importantly once they reach the sales volumes they need will they actually be able to make a profit out of their products? They say yes.

Considering the big institutions backing them it seems reasonable to assume us little investors aren't being played for fools. It is also comforting to see the chairman buying up this stock with his own cash over the past year or two. He now owns almost 700,000 of them. That is a pretty big commitment. Maybe he knows more than we do? Or maybe because he is so close the wool has been pulled over his eyes?

[xpress]

Well the management have now given some numbers to think about. NZ$40 million EBIT in 2011 target. OK it is only a target but seems to be achievable. If true it should give a Market Cap of around 400 m at 10 x PE or 1 x Sales. That would be 3 1/2 times current Market Cap. It certainly sounds like they have the sales potential - they now say that they are only limited by capacity to produce. Not a bad problem to have!

[Scuffer]

Your quite right they appear to be making headway, but the market are not buying into it at the moment, which is reflecting the sp.

[emearg]

Your quite right they appear to be making headway, but the market are not buying into it at the moment, which is reflecting the sp.

I'm don't agree. Considering the state of the stock market, and how some really high quality companies have taking a huge beating share price wise I would suggest WDT's share price is doing remarkably well. If the market didn't understand the potential I would think the share price might well be in the low 20's or even worse i.e about half of what it was before the market went off the boil.

[Scuffer]

Your probably right the sp should be lower especially after the pretty picture just painted of Ross but maybe he is just trying to keep his dream alive, the manufacturers are already starting to bang on his door the near future should be very informative as to where WDT are heading.

[Codfish]

What everyone is waiting for is proof that WDT can deliver in volume. With the new facility in Singapore only just coming on line it would be daft to jump in now. There are bound to be teething problems and if any of them prove to be serious that will knock the SP quite a bit I would think. Shouldn't be too long before we have an idea which way it is going.

Having said that, I'm a big fan of what they are trying to do. I've backed them with some of my hard earned and will be looking to top up at some point. I doubt that competitors are threat any more, WDT are are away and running, I hope they don't drop the ball!

CF

[Scuffer]

If oil doesn't come down in price everyone will be looking to provide efficient energy use in all areas, not to mention the effect on the environment I can see a major shift in how the worlds energy supplies are met and if WDT can play a small part it will make a few NZ shareholders very happy.

[xpress]

Yes. Well I suspect Mr Green has learnt a lot about selling motors since those early days. I know the traders will wait until solid earnings are confirmed and the share price is on the rise. Reminds me of NZOG (which I also held for years before they started moving) but of course a completely different type of business. I look forward to that maiden profit announcement!

[Codfish]

I wonder why WDT is not disclosing the good news.

http://www.scoop.co.nz/stories/BU0808/S00218.htm

Shouldn't be long before we know if they can deliver on all that promise.

CF

[Nevl]

Momentum for sales is Building. Another good sales announcement and the rights issue which was expected.

Am glad they are going for it!!

It has being a long wait though but I am waiting till 2011 on this one. Of all the stocks on the NZX this is the only one that I think that has real 300% potential. But sales must be well over 1mill motors now.

[Awamoa]

Momentum for sales is Building. Another good sales announcement and the rights issue which was expected.

Am glad they are going for it!!

It has being a long wait though but I am waiting till 2011 on this one. Of all the stocks on the NZX this is the only one that I think that has real 300% potential. But sales must be well over 1mill motors now.

I agree but unfortunately the market doesnt like the announcement.

[shasta]

Momentum for sales is Building. Another good sales announcement and the rights issue which was expected.

Am glad they are going for it!!

It has being a long wait though but I am waiting till 2011 on this one. Of all the stocks on the NZX this is the only one that I think that has real 300% potential. But sales must be well over 1mill motors now.

I'm sure Easy Money would say CER, but if you've prepared to have your capital tied up til 2011, i wish you all the luck you'll need!

[Nevl]

yeah I know 2011 is a while but when it runs it will really run so better to be in now that try to time it. Could only get 5% at the bank anyway.

[duncan macgregor]

HUDS, The reason that anna created the new thread was to disguise the rubbish that they wrote on the other thread. If you read the WDT threads from start to finish you will see that the same people have been averaging down still bleating the same message. By starting a new thread we might not notice how stupid they were on the other thread. It makes good reading for new investors. macdunk From 2005 when the share price was 44c its now 13c. They keep coming back for more money spoiting bigger and better promises. Macdunk

[Nevl]

From 2005 when the share price was 44c its now 13c. They keep coming back for more money spoiting bigger and better promises. Macdunk

guilty as charged. Still consistent sales growth since 2005 of over 100%. Not a bad thing.

[shasta]

guilty as charged. Still consistent sales growth since 2005 of over 100%. Not a bad thing.

If shareholder returns are zero, then you are better off getting 5%.

If you have bought in for the story/long term i hope as a spec it forms a small %age of your portfolio...

2009 will throw up many bargins, & locking up capital in poor performers could affect your total performance.

Disc: I hold some URAO & cash, but soon will start spending :D

[The Doctor]

..largest customer has confirmed its INTENTION to order....'don't like it...another rights issue...outski.

[Awamoa]

Received my rights issue notice today.Anyone taking up their offer?

[winner69]

Received my rights issue notice today.Anyone taking up their offer?


Pretty heavy dilution with this offer ..... better take up the offer or you'll miss out a decent chunk of the future profits

[winner69]

See somebody wants to sell his rights for 5 cents

[craic]

See somebody wants to sell his rights for 5 cents
Smart cookie - anything over 0.05 cents will be worth taking Woof, Woof.

[xpress]

well I can't decide. I still believe in the products and company, but cannot keep pumping money in. Unfortunately just at the moment the company probably will not be able to raise capital any other way. They effectively halved the value of my investment with the pricing of these rights - which puts the market cap back to what it was two years ago. Is this the best for the company? Will they become cash flow positive this year? mmmm

[Nevl]

yep am taking up my rights but I am a sucker from way back for this company and will be over subscribing. However I think they are on the right path though would like to see then developing their own products rather than relying on being a commodity producer. Maybe develop a Wellington brand targeting niche markets where the EC motors are effective but manufactures are not moving to new technology.The appliance market is too crowded but maybe develop motors for car fans and laptops for instance. The cleanroom technology is another instance. There must be other applications where the weight and power advantages make a difference.

[The Doctor]

all sizzle wafting along....will you ever see a 'sausage'?

[ekman]

What will happen now. Rights issue closed. Money in the bank? Increasing sales effort. Manufacturing plants in place. Looking for a cornerstone shareholder.

[tobo]

yep am taking up my rights but I am a sucker from way back for this company and will be over subscribing. However I think they are on the right path though would like to see then developing their own products rather than relying on being a commodity producer. Maybe develop a Wellington brand targeting niche markets where the EC motors are effective but manufactures are not moving to new technology.The appliance market is too crowded but maybe develop motors for car fans and laptops for instance. The cleanroom technology is another instance. There must be other applications where the weight and power advantages make a difference.

(my emphasis.)
The thing is, it's quite a big step to change from the mentality of clever inventor and producer to marketing/packaging.
It has been done, though.

This is definitely a good idea for greatly expanding profits, and is classic marketing business development strategy, but like I said, not a simple change in emphasis.

Held some time ago. Not currently.

[Arthur]

http://www.wdtl.com/rebate_programs.php

[Nevl]

Well happy with the rights issue and very happy with WDT report. Feb has best sales ever and still on target for $40mill. The figures on energy saving are very compelling. The pay back is less than 6 months and in some areas less than 3 months. Thats a lot of money saved in tight times. Oil prices going back up. All looking good for WDT. The better mix of products is helpful and direct sales over the internet is a good step. Lets hope they get more innovative as sales build. Will be interesting to see how many of the Total integration projects turn into real sales. Nice to see that they actually turned down customers who were offering low prices.

I wonder if they could set up a business to take over the refridgeration for a super market and then make money on the lower energy costs.

Anyway happy and still a holder. Roll on 2011

[Lego_Man]

I agree - let's just hope it's not a false dawn though.

I'm looking forward to making some serious coin out of these guys in the long term.

[Anna Naum]

Wellington Drive Technologies Limited have provided NZX with a copy of their Annual Report for the year ended 31 December 2008.

Outlook

As was noted in detail in the Prospectus for the company’s recent rights issue, the outlook for 2009 is for sales of $40 million, with 1 million motors being sold during the year; the first two months of the New Year sees us on target, with February being the best month yet for sales in the company’s history. We expect to achieve a substantial improvement in margins in the second half of the financial year, resulting in a much reduced loss, and we continue to target operating breakeven late this financial year.

While budgets have not yet been prepared for 2010, assuming some further growth in sales,
ongoing tight control of operating costs and that Wellington achieves its targeted gross
margin at the end of 2009, the company expects to operate profitably in 2010.

Directors have resolved that no dividend be declared.

[Lego_Man]

Market loved that, WDT's share price really got a rocket up its rectum today.

[tsb]

The Mexican order was for 400,000 units if I remember correctly. Does anyone know if this firmed up or is it still sitting as "intent to order"??

[emearg]

It was interesting to see the directors taking up their shares. And the chairman buying in in a big way!! Good to see them putting their hard cash behind the business. They obviously have faith it will be a winner...

Here is a link about Wellington motors including the new ones coming out this year.

http://www.nxtbook.com/nxtbooks/bnp/ad0409/#/32

[Nevl]

Yes I think the directors know how negotiations are going. Given that sales this year are expected to be $40mill and the value of the company is about $70mill. There is plenty of upside if one more Total Intergartion sale goes through. They have I think 3 more deals that are in negotiation all with potential sales of several million motors. If we take it that each motor sells for around $35 then the potential for a doubling of sales is pretty good. The Panasonic deal would be the biggest of course and I would like to get an update on that one.

Yes the 400000 is a confirmed contract that they are delivering motors on at the moment!!

So thats 600000 other motors to smaller customers.

[craic]

And still no profit after 10-12 years?

[sharer]

And still no profit after 10-12 years?

I think the recent Report indicated Operating Profit expected now in H2 2009.

[emearg]

And still no profit after 10-12 years?

True. But it has only been the last four or so they have been worth selling in quantities worth mentioning. And at the start most of the sales were AirMovent which didn't impress me much. Now they are selling their own designs in every increasing quantities. Even if they don't break even this year 2010 should be a good year. They have desirable products, they are capable of producing them in adequate quantities and a market for their product now exists. It has taken a long time for that last one, but the world is slowly waking up to the realities of waste.

[Nevl]

Also the first 10 years of the compnay the business model was seriously flawed and set back the compnay considerably. The asking for huge licence fees and pie in the sky estimates was just dumb. Ross Green did well to actually rescue the company after all the lousy decisons and stupid ideas. They concentrated on a few products that work and have easy to understand economics.

I still think are getting a lot wrong but slowly heading in the right direction. Though Craic is correct we should of being at this point 10 years ago.

[emearg]

I still think are getting a lot wrong but slowly heading in the right direction. Though Craic is correct we should of being at this point 10 years ago.

I am very interested to hear what you think they are doing wrong. Are you able to elaborate? Cheers

[Nevl]

I am very interested to hear what you think they are doing wrong. Are you able to elaborate? Cheers

Capital Raising's have being peicemeal and not very coordinated. They should have raised $100 to begin with about 3 years ago rather than this 10 mill each year. They also get enanmoured of side shows such as that seaweed dude they tried to hook up with a few years ago.

I still feel they lack ambition and are not really willing to go 110% which is what a product like this is needed and I also think they are too ready to settle for the commoditisation of the product rather than really create a Wellington Brand and push that.

They are at the mercy of the customers though to be fair they did turn down contracts that they felt undervalued the product.

To be fair some of the criticisms have being addressed but only after a lengthy and energy sapping process that has allowed competitors to catch up.

I still back WDT and have a lot of shares but like Craic feel it has being a story of missed opportunities and misplaced energy.

[ekman]

I have a holding since 1996 and share the sentiment with Nevl. I also belive that some of the directors should now be replaced.

[duncan macgregor]

Duncan, your opinion is as good as anyone's and you have every right to it IMHO

It just occurred to me that this particular news release would give you pause for thought.

You have told us that we shouldn't invest in NZ manufacturing companies because the Chinese would be more competetive at this (so no FPA for you - fair enough I say)

You have also told us not to invest in WDT because the chinese will steal the patents and out-compete for the same product (also it seems, the MD "gets paid too much" whatever that means)

So what do you think of the fact that WDT can sell their technology into the Chinese market and clip the ticket on the way through? - I think that this is pretty cool.

Cool (and clever, you would have to admit) because the Chinese manufacturer that has sole distribution rights in China will know,and will be able to enforce (in a way that no western company could ever hope to) how to prevent its rights from being ripped off by the Chinese.

Did you notice how low the volume of rights trading in WDT was - barely 1% of shareholders chose to sell their rights, choosing instead to stump up with the extra cash - are they all fools in your opinion? PGL wrote that on 22-12-2005 when i think the share price was in the forty cent region. The share price is 16c today, so what went wrong?. The company at that stage was being bled dry by over paid management who seemed more interested in feathering their own nests than rolling their sleeves up and getting on with it. Promise after promise real pie in the pie stuff with the share holders being asked to fork over more money.
it seems this company will always make a profit next year, but never this year. I wonder how much money they have to make for the gullable long term share holders to even get their money back. Macdunk

[emearg]

PGL wrote that on 22-12-2005 when i think the share price was in the forty cent region. The share price is 16c today, so what went wrong?. The company at that stage was being bled dry by over paid management who seemed more interested in feathering their own nests than rolling their sleeves up and getting on with it. Promise after promise real pie in the pie stuff with the share holders being asked to fork over more money.
it seems this company will always make a profit next year, but never this year. I wonder how much money they have to make for the gullable long term share holders to even get their money back. Macdunk

I think the global economic crisis happened which has effected the share price much more than bad decisions and slow progress. In the last 52 week period WDT's share was at 40 cents. For the first part of the crisis it help up pretty well, but collapsed when the rights issue was announced.

Obviously buying WDT five or even one year ago wasn't a great idea...with hindsight.

But that last line applies to most shares. While some sold their entire portfolio before the crisis and collapse of share prices globally most didn't.

Long term holders will need to be patient to get their money back, but so will those who held Telecom shares which were once thought of as one of the most solid stocks in our market. Not everyone would have agreed with that claim, but the market as a whole did.

Dunc, do you think they have moved on from pie in the sky thinking? Have you bought any or will you be buying any any time soon?

[duncan macgregor]

We are not debating the general market only a particular companies progress to profitability. The promises made then with the benefit of later hindesight the result. We all know the market crashed some of us were wise enough to predict it, others had no escape plan and followed it down. The point being, read back at what was said in the past, with all the blue eyed brigade expectations over the years, then ask your self what has changed?.
The past is the past, the company dithered about in the good times bleeding the investors promising those elusive profits the following year.
Now that the bad times are upon us, the only thing that has changed is the market in general.
All manufacturing companies will only operate in slave labour countries in the future as i predicted, with patents not worth the paper they are printed on. Factories are relocating overseas, we import chinese replica engines of honda for an example in beach buggies.
What makes you think WDT electric motors will be the exception?. If patents were worth the paper they were printed on why does NZ import replica fakes. The company should have been running at a profit years ago, read back at their promises with an open mind before filling the troughh. Macdunk

[ekman]

it seems this company will always make a profit next year, but never this year. I wonder how much money they have to make for the gullable long term share holders to even get their money back. Macdunk

Gullable long time holders would have an entry price below present share price taking up all the rights issues over the years. The company has a manufacturing site in Auckland and two in China a logistic manufacturing center in Singapore, sales teams and logistic centers in North America and Europe. New designed products are being introduced to the market. The risk of patents being copied is the same for any succesfull product manufacturer. To create a succesfull product and brand takes many years. I belive it took Microsoft 25 years to get where they are today

[NZ__Allblack]

Well I"m pretty new to share trading, but I like the look of WDT. They have a great product and it seems like they can go only go up up up from here. I've got 30000 @ .15 and I'm just looking to put them away for 10 years or so.

[tsb]

They say they willmake a profit next year

[dartMonkey]

Looks like a high tight flag to me. I doubt you'll have to wait 10 years.

[xpress]

Wellington’s revised trading outlook continues to demonstrate growth, with projected revenue of NZ $10.5m for the six months to 30 June 2009. The revised, interim revenue projection is 60% higher than revenue reported for the prior corresponding period, and is lower than the existing Prospectus projection of NZ15.6m, as issued on 9 January 2009.

Noting the revised interim projection, and taking into account recent demand estimates from major customers, Wellington has revised its revenue outlook for the 12 months to 31December 2009 to NZ $33.7m. The revised, full-year revenue projection is 130% higher than revenue reported for the twelve months to 31 December 2008, however, it is less than the Prospectus projection of NZ$40.0m.

Expected second half revenues remain largely in line with Prospectus projections.

[winner69]

You have to wonder if they know whats going on if the numbers they issued a few months ago for the current half year are so far out when it comes down to reality .... jeez they were already in the half when the prospectus was issued

Never mind all back on track for the 2nd half year .... yeah right

[NZ__Allblack]

any of you guys going to the AGM ? I"d like to see how they'd reply to some of these comments...

[buns]

Did anyone make it? Just reading the doco's that came out of it.

They seem super optimistic about the future, and are talking big growth, with large contracts just around the corner and a strong cost out programme.

SP followed this, late last night and a bit today..

[buns]

Anyone still watching this?

There last announcement was positive, indicating a good result coming soon. I’m assuming the SP fall is linked to traders cashing in on other sure bets that are going at the moment. A tad worried it could be something else.

Any idea when there next announcement is?

[xpress]

Yep, I'm still a faithful holder! Patiently waiting for a maiden profit. I don't think any positive movement will happen until they announce a trading profit. Soon I hope.

[brucey09]

senors
wdt is suffering fallout from your techo company of the year provenco

[Raven]

The exchange rate can't be helping either. Particularly with the US. I'm a little worried about them having enough cash up their sleeve to cope with some addtional slippage from their last update. They say they expect to keep the same year-end cash balance mentioned in the January prospectus which I think is a little over 2.2 mil. Seems to cut things a bit fine. I think in the 08 annual report they made an unexpected gain of about 1.8 mil based on the exchange rate so I assume it can go the other way just as easily. On the bad side is the exchange rate but on the positive side with things potentially looking a little better in the US sales could be looking a little better as well.

[sharer]

I'm also a longterm holder, and sharing the anxieties of Buns & the others. I hope the guess from Mexico about PVO collapse contagion is right, but i fear the speculation about the seemingly small amount of cash in hand to buffer any slow or delayed sales might be closer to reality.

[xpress]

Well something is happening. 600,000 shares is not a normal trading day for WDT

[emearg]

http://www.nzte.govt.nz/explore-export-markets/Export-Intelligence/Pages/India-to-enforce-energy-efficiency-measures.aspx

India to enforce energy efficiency measures

NEW DELHI – India will make energy efficiency ratings compulsory for electric appliances, including air-conditioners and refrigerators, from January 2010.

Currently a voluntary initiative, Environmental Minister Jairam Ramesh said that the efficiency ratings will also apply to appliances like electric motors, colour televisions and LPG stoves by June 2010, and will encompass products sold in India or exported.

The government hopes to save 10,000 megawatts of power by efficient use of energy by 2012.

Unveiled in 2008, energy efficiency is a key focus in India's national climate change policy and lays out a roadmap to a green economy without setting a target for carbon emissions. As Asia’s third largest economy, India is also the fourth largest-emitter of carbon dioxide.

Under a future trading scheme, businesses using more energy than others would need to compensate by buying energy efficiency certificates from businesses using less or renewable energy.

Each industry or sector’s energy benchmarks would be determined by the Indian government, with a reward and penalty system coming into place for companies not meeting stipulated targets.

Source: Reuters

[winner69]

Another great result and another promise of profitability in 2010

Accumulated losses now $55m

What gets me is what they do sell they don't even cover the cost of sales ... ie no gross profit before expenses

Forecast loss for full year $14m at USD at 65 cents

You guys hanging in there? You deserve some reward some day

WDT market cap still over $50m

[Cannibal]

Nearly 400,000 traded today - is something up?

[winner69]

Hunter hall bailed out of NZ Farming Systems .... I see they have an interest in thsi dog as well .... maybe sick and tired of NZ investments and getting rid of these as well

No doubt about it ... summin up eh

[GR8DAY]

......if this co. is a dog Winner then every other co. must be a rabid mongrel!! show me a better co. with such upside potential. they are producing highly applicable and much needed products for todays energy reduction drives. they currently sell around $1m of there EDR? (brushless)motors a week. there are supermarkets in the US alone that run over 600 such motors in their refrigeration units. India has just passed regulations to force the use of such motors. I happened to be watching the trades yesterday in WDT...someone was feeding parcels of 75000 to the market and they were snapped up immediately, so yes I also think something is "going down".....and I dont mean the share price. (i think over 900000 changed hands yesterday)

[winner69]

.....they currently sell around $1m of there EDR? (brushless)motors a week. .....

There's a chart in their half year report that sort of shows $6m sales of ECR things for the last 6 months ... that seems to be about $1m a month ... not week

Problem is that the motors seemed to cost a $1m a month as well ... gross margin zilch

Total 6 months revenues of everything about $10 ... full year forecast if everything goes to plan just under $30m and still forecasting continued losses even on this huge increase in sales

Yep plenty of action in WDT shares over the last few days - over 4 mill shares changed hands and the price has fallen from 12 cents to 10.3 cents to 10 cents to 9 cents in that time ..... most would say that is selling pressure ... but no doubt that buyer snapping them them up is happy as larry

Thats how I see it ... but then what would I know ... and apologies for calling it a dog

[GR8DAY]

.....apology not required WINNER but accepted anyway!....and I stand corrected on turnover, was just going from memory and trying to sound intelligent.....bugger blew it again! But I do stand by my thoughts of them being a co with great potential ( possibly short/medium term). Im gonna keep a good eye on them with finger ready on the "buy" key.

[winner69]

Great - Still need to sort out their profitability problem - sell the motors at cost currently

No keen buyers today? Whats up?

[upside_umop]

Winner, from what i remember reading the report...arent they to undertake cost cutting measures to provide decent margins?

Believe when I see it...I do like the idea of this company but has been too many promises and never delivered. Still, we have been through one of the greatest financial meltdowns and to increase revenue has been a feat in its own. If only they had a little more cash the market might not be so fidgety...will they get through without having to raise more?

Was one of the first shares I owned...but sold out at 40 something cents and never been tempted to get back in. Will be for a trade, perhaps.

[winner69]

Winner, from what i remember reading the report...arent they to undertake cost cutting measures to provide decent margins?

Believe when I see it...I do like the idea of this company but has been too many promises and never delivered. Still, we have been through one of the greatest financial meltdowns and to increase revenue has been a feat in its own. If only they had a little more cash the market might not be so fidgety...will they get through without having to raise more?

Was one of the first shares I owned...but sold out at 40 something cents and never been tempted to get back in. Will be for a trade, perhaps.

The thing thst must be a concern is that their gross margin at the moment is almost zilch (revenues $11m ... cost of the things they sod $11m) but over the next 6 months they are going to turn this around (sell $23m of things that cost $17m). Thats some turn around and massive cost savings ... seeing they ahve put it in a forecast must be true

And that is before the operating expenses of $17-$18m a year forecast

In their report they said '.... almost all sales reported during the half
year were from stocks built and purchased before these improvements were completed' which sort of suggests that they must have a very long supply chain and have plenty of things in stock at any time

Never mind ... interesting stuff and maybe a turn around is happening .... but previous forecasts have been pretty useless .... like in January when they were on the scrounge for punters money they confidently forecast 2009 revenues to be $40m ... and now they have a forecast of $28m ..... what happened 300,000 units they hoped to sell

One day maybe they will recover the $55m losses over the years ... but the shareprice chart tells a story

[GR8DAY]

.....if they can keep increasing turnover the way they are forecasting then it shudnt be difficult to turn a profit by minor cost savings.....personally Im hopeful on this one and think their product range is solid, applicable and internationally " in vogue" ( re energy reductions and environmental issues). fingers crossed. does anyone know if this technology they use was developed here in NZ?

[xpress]

Yep. All NZ made and heaps of Patents. I am STILL holding on to mine. I would buy some but I think they will need more cash so will wait for the next issue! And the next one and the next one

[h2so4]

Yep. All NZ made and heaps of Patents. I am STILL holding on to mine. I would buy some but I think they will need more cash so will wait for the next issue! And the next one and the next one

No Way! The company is worthless.......nothing more than a stock tip. There is massive uncertainty here. I wont be putting any of my money here.

[Cannibal]

No Way! The company is worthless.......nothing more than a stock tip. There is massive uncertainty here. I wont be putting any of my money here.

Well - they are up 16.3% today on good volumes. Not everyone seems to agree with you...

[h2so4]

Well - they are up 16.3% today on good volumes. Not everyone seems to agree with you...

I am not surprised which way the sp goes as it is purely guided by the traders. There is no business principles or valuations here.

[Balance]

Well - they are up 16.3% today on good volumes. Not everyone seems to agree with you...

$31,000 worth of trades - what a joke. The buyer backed off when selling came out at 9.9c. A bad trade.

[winner69]

Hunter hall bailed out of NZ Farming Systems .... I see they have an interest in thsi dog as well .... maybe sick and tired of NZ investments and getting rid of these as well

No doubt about it ... summin up eh

Well it wasn't Hunter hall bailing out ..... they putting another $8m odd in

Case of double or nothing.... or just realising the potential in WDT

[emearg]

All I hope is that Hunterhall have more information than we do about how WDT's cost reduction programme is going. Hopefully it is positive and swayed their decision because it won't take long to burn through 8 million as their sales continue to increase unless they actually DO significantly reduce the cost of each unit sold rather than just talking about it!

Fingers crossed they will produce some figures around this when they come asking for more cash rather than just using fluffy words as they are soooo good at!

I didn't participate in the last cap raising as it wasn't underwritten and their figures seemed hugely optimistic.

I wonder if the one announced today will be?

There are a number of things about this company to wonder about...

[GR8DAY]

.....hunterhall are hardly going to throw $8m at any company without firstly having done their due diligence..............................surely????

[emearg]

.....hunterhall are hardly going to throw $8m at any company without firstly having done their due diligence..............................surely????

That is what I am hoping...

[winner69]

Maybe 3rd time lucky for HH .... after losing zillions on Feltex and NZ Farming Systems

And this is pretty heavy averaging down for them as well

[winner69]

Green all enthusiastic and optimistic

http://www.nbr.co.nz/article/wellington-drive-relying-big-orders-hold-further-capital-raisings-110781

Hunter Hall taking 85 mill shares is pretty dilutive for existing shareholders ... so sahre of the huge rewards being watered down for many

[winner69]

Though I was surprised to read this a week or so ago - "The largest disappointment of the result was the announcement that the Panasonic deal that WDT had been working on has fallen over," Harvey-Green says (from Forsythe Barr)

Hopefully no other things WDT had been working on will fall over

[GR8DAY]

winner........what is a "share purchase plan" and how do you think it will effect the share price?

[winner69]

A share purchase plan is when the company gives shareholders the opportunity to buy more shares in the company.

In this case Hunter Hall are to take 85 mill shares at 10 cents and WDT prob thinks its a good idea to offer other shreholders some ahres at 10 cents as well.

That 85 mill shares Hunter Hall doubles the number od shares they have at the moment so they will end up with more than 30% of the company - about 10% more than they had before - that is how much existing shareholders interests have been diluted by - no wonder they think they need to offer you some more

Interesting article in the SMH this morning that says most of the recent capital raisings have ripped off retail investors .... but some retail investors have made windfall gains (like the writer who has made $214k gains on his portfolio of $40k) ,,,, but further down the track they have less of the company than they originally had
http://www.smh.com.au/business/around-the-grounds-of-capital-raisings-20090915-fo18.html

Hard to see windfall gains from a SPP with WDT

[Lizard]

I try to look at WDT periodically to see if it ever looks like a good investment. Given the revenue growth rates, it has potential...

However, the crux is that it is difficult to ascribe value until the company becomes self-funding and ceases to raise new equity. Picking the last capital raising before profitability seems like a possible fundamental entry (and perhaps before positive free cashflow - but best I don't complicate my argument!).

So my questions at this point are "will this be the last capital raising?" and "will they book a profit in 2010?". Looking at the accounts, the current proposed cap raising looks likely to get them through to at least HY 2010. Which may be all they need if things are running on track. But will second half be profitable?

The figures in the interim report have me dubious. Looks like they were hoping for 25% gross margins on the motors in the second half with new, lower cost, inventory, but currently only sit at about 15%. Operating costs for the year to date are at $8.9m (ignoring forex losses) - they claim these will fall in second half due to restructuring, and forecasts suggest about $6m second half. Therefore I'd pick at least $12m op costs for FY 2010, plus the $2.1m in D&A. So to book a positive EBIT, they need to cover $14.1m of expenses. At the (more optimistic) 25% margins, that means sales in 2010 have to escalate to at least $56m - about double current year forecast. This is possible, but seems tight - and unlikely that they'll blow everyone away with their result. More likely to disappoint (again!) with a loss of $2-4m for 2010.

So could be waiting another 12-18 months for the potential to emerge - no wonder they want a cornerstone shareholder like HHL as defense against hostile takeover. After throwing over $80m of capital at this business over many years, it would be a shame to see NZ investors give it away for less - they can probably get it there eventually - if they're not forced to issue new equity beyond this round. Beyond the "break-even" mark, their sales growth should make for an eye-catching profit increase. But might be waiting another 2 years or more to see it...

[duncan macgregor]

PGL, Good to see rational debate for a change on the forum. Nobody is ever right all the time, so we must expect to get it wrong sometimes. When i get it wrong it costs me up to the time it hits my stop loss then I get out regardless of how right I might feel. All good investors never buy in a downtrend, WDT is in a downtrend. All smart investors have a stop loss, WDT hit every stop loss in the book. To trigger the enthusiasm of the gullable come up with a new product, then exploit them for all they are worth. That is the reason that I selected WDT and CER in the bad share competition and was third. The chinese dont recognise patents like we do. The kid next door has a chinese buggy with a motor that is an exact replica of a honda with no names or numbers. Honda parts can be fitted. Remember the old austin engine in the sixties, Datson made a car with the the exact same motor which was just another nail in Austins coffin. WDT have created huge losses for their shareholders, promised the earth and delivered very little. I really would be very surprised if they ever show a profit I think as an investor who cares better prospects else where. macdunk Thats what I said nearly four years ago. Since then its been a downtrending share asking for money from the gullable and showing bigger losses and promising the earth. Macdunk

[Lizard]

MacDunk,

Summary of WDT revenue:

FY02 $0.3m
FY03 $0.8m
FY04 $0.9m
FY05 $1.8m
FY06 $7.1m
FY07 $10.7m
FY08 $14.5m (reporting period changed)
FY09 $27.1m (forecast)

While you could say that they've extracted money from the gullible to get here, at least they have managed to produce the goods and investors still hold a stake in the outcome. They've typically increased revenue by 75% pa over the last 8 years. Eventually, they will achieve the scale to become profitable. Sometimes I have a suspicion we NZ investors undermine our own market and businesses with our overly-cynical attitude.

In a market more willing to provide new capital for development, the dilution would be less and the early investors better rewarded. Furthermore, if investors are not supportive in providing development capital, then that is one less reason for a company to take up a listing.

Whether a company should or shouldn't be supported in the capital markets comes down to whether the returns on capital invested are ever there and over what time frame. In WDT's case, it looks like the answer might be positive - but in a very long time frame for that early capital. More recent capital has a much better chance of seeing a positive return within 2-5 years.

For the active traders though, the sweet spot probably falls about 6 months before the sales growth kicks into the profit line and we're not there yet.

[Capitalist]

Agree Lizard. I was a relatively early investor in WDT - I sold a couple of years ago.

Sadly scientists in all their guises (bio-tech et al) are crap capitalists and they will not be getting any more of my money.

[Balance]

.....hunterhall are hardly going to throw $8m at any company without firstly having done their due diligence..............................surely????

Didn't Hunter Hall do their dole in NZS?

Likewise in Feltex.

Wouldn't treat them investing in anything as indicative of future success!!!!!

[kizame]

Crikey!!! A company turning over 10.7 and 14.5 million big ones respectively,AND still not profitable??? Where does it go? Paper thin margins?
Don't know this co.but at a glance at those figures,I don't think i would want to be IN.

[Awamoa]

I see they are calling on the shareholders for more funds.
This is starting to become tiresome without starting to see profits or shareprice growth.

[zigzag]

I see they are calling on the shareholders for more funds.
This is starting to become tiresome without starting to see profits or shareprice growth.

BUT -Check out the growth in revenue. Lizard's post a while back illustrated the rapid growth these guys are achieving. I hold, and will be taking up my full entitlement under the SPP. That said, it is coming down to the wire regarding turning that growth into a decent return for shareholders.

[emearg]

The fact the directors and chairman have been buying up pretty big over the last few months makes me think there may indeed be some gold at the end of this rainbow. If there was no chance they could make and sell their motors profitably these insiders wouldn't be wasting their money.

It seems they need to achieve some seriously large volumes to make this business profitable. The volumes are building so maybe this dog will have it's day...

Personally I halved my holding a month or two ago as I became incredibly concerned about them becoming insolvent. Then they announced they had secured a big injection of cash from Hunter Hall and the rights issue so I bought back what I had sold plus a few more.

I will be taking up my $5,000 worth next month.

This one isn't for the faint hearted but I think it is worth the risk.

[h2so4]

In terms of growth? Their losses are outstripping their sales $2 to every $1. They will need all of the 9.65m in new capital just to keep the doors open until Christmas. Maybe they can turn it around. But turn arounds seldom happen. Pass on this one.

[xpress]

I think the share offer was to give all shareholders the same option of buying shares that was offered to major shareholders. I think it is nice to see this happening - although at the moment you can buy shares on the market for the same price. I have been buying more shares lately. As long as the current "trend" (increasing sales) continues I believe that they will become profitable. I think that a big chunk of costs over the last year or two are a result of the fast growth in business - most people who run businesses will tell you that you need to spend money to grow your business, it's a bit of a chicken and egg thing.

[Lizard]

...although at the moment you can buy shares on the market for the same price..

Actually, if the price remains below 10.2cps for the period from 6-12 November then you will receive shares at below the current 9.4cps. Shares are to be issued at the lower of 10cps or 10% below the average closing price of that 5 day trading period.

[zigzag]

Perhaps in another country, in a bigger market, WDT could have raised the capital a lot quicker and in larger tranches, instead of having to raise it in dribs and drabs in little old NZ. I hope there will be some kind of update along with the SPP documentation.

[Lizard]

Okay, decision day; am I going to take up any spp shares?

So far, since paying far too much for my WDT shares a year or two ago, I have avoided participating in cap raising. (Probably should have since most of them could have been sold shortly afterwards for a fair gain! But have this one in long term investment portfolio).

I doubt that WDT will make a significant profit (probably actually a small loss) in 2010. My best guess for 2011 is that they achieve NPAT of $7m assuming no major business disasters. Based on shares on issue of 648m post raising (conservative, since 75% uptake in spp seems unlikely), that's 2011 eps of 1.08cps. Put it on a P/E of 15 and the shares would be trading at 16cps post result. I'd want at least a 25% pa return on investment - so working back from 16cps over 2.5 years (now till profit announced), need to get shares at no more than 9.2cps. Based on the last 5 days trading, that looks okay. Although institutional holders might try and push the price around next week to make sure small holders don't get a better deal than their 10cps.

Big question as always for WDT is will this be the last cap raising? The calcs are only valid if it is and it looks a bit tight. Plus, despite strong growth in revenue, WDT have a record for over-optimism rather than conservatism.

[Nevl]

Okay, decision day; am I going to take up any spp shares?

So far, since paying far too much for my WDT shares a year or two ago, I have avoided participating in cap raising. (Probably should have since most of them could have been sold shortly afterwards for a fair gain! But have this one in long term investment portfolio).

I doubt that WDT will make a significant profit (probably actually a small loss) in 2010. My best guess for 2011 is that they achieve NPAT of $7m assuming no major business disasters. Based on shares on issue of 648m post raising (conservative, since 75% uptake in spp seems unlikely), that's 2011 eps of 1.08cps. Put it on a P/E of 15 and the shares would be trading at 16cps post result. I'd want at least a 25% pa return on investment - so working back from 16cps over 2.5 years (now till profit announced), need to get shares at no more than 9.2cps. Based on the last 5 days trading, that looks okay. Although institutional holders might try and push the price around next week to make sure small holders don't get a better deal than their 10cps.

Big question as always for WDT is will this be the last cap raising? The calcs are only valid if it is and it looks a bit tight. Plus, despite strong growth in revenue, WDT have a record for over-optimism rather than conservatism.

In the same position though today I just took the chance to take up my allocation. Not happy to see the price rise in the last few days however!! Usually WDT makes a positive announcement in the month after a cap raising however. My average price is somewhere around the 12cps now.

Will be interesting to attend the next AGM. Am hoping for some more news on sales but still think they are being too timid and need to start targeting the consumers not the manufactures. Own brand WDT products.

[Lizard]

Well I guess if the insto's decide to push the price to 11.5cps next week to make sure the spp is at 10cps, it provides a bit of profitable arbitrage - take up the allocation and sell the equivalent number on market. No scaling to catch you out this time as far as I can tell.

[Nevl]

REL: 1400 HRS Wellington Drive Technologies Limited

ADDRESS: WDT: Chairman's Address - EGM November 6

I am pleased to open the meeting and welcome you all today.

The business of this meeting is to consider and, if thought fit, to approve
the placement of 85 million shares at 10c per share to funds managed by
Hunter Hall Investment Management.

The placement

I will begin by summarising the background to this placement.

As previously advised to shareholders, Wellington has been conducting a
search for a suitable cornerstone shareholder. In conjunction with an
investment banking advisor the company has undertaken a substantial search
process. While this generated a good degree of interest, the board concluded
that it would not be possible to secure a capital injection on better terms
than those offered by Hunter Hall within a timeframe compatible with the
company's cash requirements.

I draw your attention to three key aspects of the placement that shareholders
should consider:

1. The placement, in conjunction with the smaller follow on institutional
placement and the Share Purchase Plan, should provide Wellington with the
capital it needs to reach profitability;

2. The pricing of the placement - 10c a share - is at a small premium to both
the average price of Wellington shares in the period before the placement was
announced and to the current market price.

3. The Independent Expert's report concluded that the placement is fair to
non-Hunter Hall shareholders in Wellington.

Hunter Hall is Australasia's largest ethical fund manager and has been a
significant supporter of the company for five years. Also, Hunter Hall is
already Wellington's largest shareholder. The proposed placement will lift
their shareholding to 31.6% of the company, prior to the issue of shares
under the proposed Share Purchase Plan. I note the Independent Expert's
report concludes that

"...while the commensurate increase in HHIM's relative shareholding will
technically provide HHIM with the ability to unilaterally prevent the company
from following some courses of action, we do not believe that effective
control of WDT will pass to HHIM if the Proposed Allotment is approved."

Directors believe that the placement to Hunter Hall is an excellent outcome
for Wellington and have no hesitation in recommending it to shareholders.
Shareholders will note that several Directors have purchased shares on market
since the announcement of this placement to Hunter Hall.

Trading Outlook

I now have a few words about Wellington's recent trading and the outlook for
2010.

During August and September, Wellington traded in line with the guidance
provided in the company's interim result release in August. As we move into
the final months of 2009 some of our larger customers have revised down their
projected orders for the last quarter of the year, with this demand in some
cases being pushed into the first few months of 2010. In addition, like many
New Zealand companies doing business on the world stage, we have been
adversly affected by the continued rise of the New Zealand dollar. When we
gave full year guidance in August we assumed a NZ/US rate of 65c, based in
part on advice received. As we now know, the New Zealand dollar has continued
rise and is now above 71c. As a result we now expect that for the full year
revenues will be 5% below the bottom of the previous guidance range at
NZ$23million, with approximately 3% of this shortfall due to the higher
currency.

Margins are improving and the effects of the reductions in overhead costs
made in the first half year are coming through. Some further cost reductions
have been made since then. Sales have grown significantly. Consequently, the
company's net loss, before exchange rate variations are considered, is
expected to remain within the previous guidance range at NZ$14.5 million,
although in the lower half of it.

I point out that while short term demand from major customers remains
volatile and difficult to forecast, the underlying trend of strong sales
growth is continuing. Looking out to next year, Wellington expects sales
growth to be driven by both expanded sales to existing customers ,and by
sales to new customers as the Commercial Refrigeration market continues to
switch to high efficiency products. In the past few weeks we have received
some substantial orders from new customers for the early part of 2010.

2010 will also likely see the first volume sales of the new line of
ventilation motors that Wellington has developed for its OEM customer. Small
sales of some of these products have already been made, and the remaining
products in the range are in the final stages of testing prior to release for
production around the turn of the year. Sales are expected to build steadily
in 2010 and become more significant over time. Over the medium term,
Wellington believes that its Ventilation business can become a significant
second 'leg' for the company.

Directors and management retain their strong focus on taking the business to
profitability as soon as possible.

Up to date, the company has been investing to obtain customer relationships,
to develop new products, and to establish manufacturing and distribution
infrastructure. Given the market position now reached, the Board has
determined that further expansion of product line and infrastructure is not
required for profitable operation to be achieved, while still preserving
Wellington's global ambitions. With the company stabilizing in this way,
there will be a substantial reduction in operating expenditure in 2010. This
will lower the company's breakeven point, aid the drive to profitability and
reduce operating cash consumption.

While 2009 has proven to be a challenging year that has not resulted in the
level of growth expected at the outset, Wellington has made significant
progress in building its business and in setting the company up for
substantially improved commercial outcomes in 2010 and beyond.


Not bad, nothing new. Interested in seeing who the new customers are and volumes but nice to see that they are tracking along as predicted. The currency is tough but the new factory in China will help there. Funny that the main customers are in the States when Europe is the one making all the noise about climate change. Would be nice to get Tesco's or Carrefour doing what Walmart are doing.

[h2so4]

Not bad, except. New customers cost more money. And saving cash by cost cutting their infrastructure building etc. may slow the ability to meet increased demand. Is WDT running out of options to stop the cash burn?

[Nevl]

Not bad, except. New customers cost more money. And saving cash by cost cutting their infrastructure building etc. may slow the ability to meet increased demand. Is WDT running out of options to stop the cash burn?

Yeah but they are holding the loss steady and saying that it will come in the lower end of estimates so hopefully they can improve on that next year. Nice to see that they have enough capacity to handle more orders so thats a good sign. Still i am hoping for a decent announcement of sales by the new year. Another big regular customer will be nice and provide more stability.

[h2so4]

Yeah but they are holding the loss steady

I think we are being duped into thinking that. We all know that accounts don't show the true picture. Look for the cash.

Don't you think it's odd that a company that makes a loss year after year and raises capital to cover those losses then turns around and says we are going to cut costs so we can be profitable? Any business person knows the only way a business can grow and be profitable is by converting sales to cash. If a small business can't stand on it's own feet the only logical step for the owner is to sell it.

And what the future holds? All I can say is who knows?

But I hope it's all good.:)

[bonito]

These guys are the Kings! of overstatement, if you want my opinion.

Check all their previous forecast compared to what eventuated. Forecasts are not believable now.

Though one day I do believe they will sell out to someone and holders will do OK (but only if you have held in the short term). Timing needs to be a bit lucky I feel to make decent money on this pup.

In the mean time... get your wallets out I guess.

[kiwi_on_OE]

Got to agree with you bonito, their revenue forecasting is poor. Just had a look back over this calendar year at the forecasts for curr FY.

Jan - rev 40m, net (2.9m)
Jun - rev 33.7m, net (11.4m)
Aug - rev 27-30m, net (14.5-14.8m)
Nov - rev 23m, net (14.5m)

Still growth of 60% on prev year. Perhaps they realised in Jan that they just had to push the numbers so that they could get some more cash in to get them through until now, with the hope that they really would be in sight of making a profit? It does seem hard to justify/believe a revenue increase from 14.5m to 40m in a recession.

1st half 09 is rev 10.8m, net (9.9m). Looks like figures for 2nd half 09 is rev 12m, net (5m). A repeat of this in both halves next year could be a minimum starting point for next years figures - rev 24m, net (10m).

Based on cash at the end of Jun 09, 5m, less loss for 2nd half (5m), looks like they would've been out of cash by the end of 09 without the curr placements. If no further cash is raised from SPP and 10m loss next year, then they could be out of cash by the end of next year.

But what about the possible positive outcomes?

5m extra cash raised from SPP - $2500 from 2000 of 2500 shareholders?

emearg - two views on directors buying at this time - 1) Wellington is finally about to turn the corner, 2) directors holding up the share price because they really need some extra cash from SPP and they don't want to have existing holdings diluted too much. Just think how many shares you would get for your $5000 if the price was 1 cent a share. ;-)

50% rev inc to 40m would be consistent with growth in the last year or two. Possible?
Could possibly use Jan forecasts for '09 for '10 ie. net (2.9m)?

What about expenses? They say 'there will be a substantial reduction in operating expenditure in 2010'. Currently at (14m+), how about cutting expenses by the 2.9m loss I mention above to get a net of 0 for next year?

I don't really see them making any significant profit next year, but I can envisage them be close to breakeven.

[winner69]

Heck, whatever you might think losing $14m on revenues of $23m is really some effort .... esp after so many years of trying

No matter how optimisitic they are you would have to think that even breakeven is years away ... if ever

[winner69]

When Bowen says ' .....the company’s net loss, before exchange rate variations are considered, is expected to remain within the previous guidance range at NZ$14.5 million, although in the lower half of it.' does it mean that the loss for the year will be more than $14.5m as the forecast was based on USD at 65c

Got me beat

[h2so4]

Heck, whatever you might think losing $14m on revenues of $23m is really some effort .... esp after so many years of trying

No matter how optimisitic they are you would have to think that even breakeven is years away ... if ever

"...but revenues are growing and earnings losses are shrinking..."
The rationale they are using to comfort shareholders is the exact reason why people lost so much money in the early 2000s. Selling the world on ideas—regardless of the underlying business.

Don't get caught holding the bag.:mad:

[Footsie]

YOu just cant trust the forecasts.

I think the most likely scenario is a net loss of around $5m on rev of 35m for Fy10

unless things change for the positive.

As liz has pointed out... the time to invest is just after the last capital raising before profitability.

Is this the last cap raising? who knows, but if they get in a couple of extra million from the spp and run inventory down, it just might be.

currency is just an excuse. havent they heard of hedging.

I think if WDT can't cut their losses in 2010 then it curtains for them, but i think mgmt know that. its now make or break.

[Nevl]

Price was ).0877c per share. Pretty good for me I hope. Anyway I have a lot of shares now so hopefully we will see some good announcements and further sales growth. Another 100% increase in sales and I will be celebrating!!

[emearg]

Price was ).0877c per share. Pretty good for me I hope. Anyway I have a lot of shares now so hopefully we will see some good announcements and further sales growth. Another 100% increase in sales and I will be celebrating!!

I'll be celebrating if/when they stop losing money...

[Nevl]

I'll be celebrating if/when they stop losing money...

Haha fair call. Still they seem to have got a better handle on expenses. I would however like to see one of their Total integration projects lead to actual sales!! That's my biggest issue with the company so far. They get these projects but non have lead to sales yet.

[kiwi_on_OE]

Footsie I agree - it might be the last capital raising, no matter which way the company goes from here. Comments about sticking to existing products etc. makes it sounds like they know they have to deliver now. Maybe HH have put the hard word on them.

winner69 - on face value 14m loss on sales of 23m is 'impressive'. But if you believe the figures they put out, then break even on sales of 40m may be possible. Margins on sales are positive, it's the operating expenses that are the problem.

[Nevl]

Not many people took up their shares in the latest issue suggesting that this is the end of the line for WDT going to shareholders. From here on they are going to have to provide real profits.

Still I think that may be a good thing and will be looking forward to January when they release their next results.

[emearg]

They raised less than 12% of the total they might have if all shareholders had taken up the $5,000 option.

That isn't a good result. The market isn't kind to under performers at the moment. The market is even less kind to companies whose projections prove to be wildly optimistic year after year.

WDT is both.

Their website has been updated to include a 48 page, 2010 Ventilation Catalogue. It looks like their product range has increased quite a bit this year and looks pretty damn good. Hopefully they/their European distributor can actually sell a decent amount of product at sensible enough prices to make some money.

I really have to wonder about this company!

I took up my rights so I really have to wonder about my sanity!

Directors have been buying heavily lately so who knows? Hunter Hall must see something positive to come?

Fingers and toes crossed but I'm not sure I have enough limbs for this company to pull through...

[winner69]

...........Hunter Hall must see something positive to come?



.... Hunter Hall saw a lot of positives in Feltex and NZ Farming Systems as well .... they don't seem to have the same feel for NZ companies as they do fro Aussie ones

[emearg]

.... Hunter Hall saw a lot of positives in Feltex and NZ Farming Systems as well .... they don't seem to have the same feel for NZ companies as they do fro Aussie ones

Sadly enough I don't disagree.

I really don't see why they can't pull back on expansion, reign in expenses and sell their products at a reasonable price and therefore make a profit.

It doesn't sound that difficult and yet????

[Nevl]

Sadly enough I don't disagree.

I really don't see why they can't pull back on expansion, reign in expenses and sell their products at a reasonable price and therefore make a profit.

It doesn't sound that difficult and yet????

Sorry but I think you describe everything that is wrong with NZ business. Our companies suffer from a lack of ambition and the unwillingness of WDT to get a handle on this 8 years ago is exactly whats wrong with it today. If they had raised $100mill in 2002 and then launched enviromentaly friendly products in Europe and the US with energy efficiency their selling point and with enough cash in their pocket to get established they would have done a lot better. Instead they tried to do a safe license system with no real product and most importantly no competitive threat to be taken seriously. Why should the users of electric motors change if there is no reason for it. The only way to get them to change was to provide an alternative where the cost of not changing is the loss of their markets to the new guy. WDT had that chance and Ross Green got their too late to do anything about it. Now we have had to wait 8 years to get to where we should have being in 2002.

This attitude of "oh my god its so hard, lets buy a house" has not worked for NZ. We need to get out and compete and go for it. None of this oh it's too hard come home crap.

[Silverlight]

Large holder sold out today with a sale of 17.9m shares.

3.2% of market cap, so if they own more than 5% I guess we may see an SSH notice.

Hunter Hall 171m 30%
AXA has 61m 10.8%
ACC has 34m 6%
Graeme Alex Thomson had 24m at 11 Dec, (down from 5.6% to 4.28%)
Norwood Investments 18m 3.3%

[emearg]

Wow, that was a big trade! I wonder who bought in? Not at any discount from the looks of it. The rolling year sales for WDT is only 53 million shares, so today's sale was a big event!

I can assure you all I wasn't the buyer!

[Silverlight]

The trade was 17,921,559 shares @ 6.5 cents, so around a 20% discount to market value.

[emearg]

Oh yes...you are right!

Funny as the low is stated as 8 cents on the NZX site and Direct Brokings site

But looking at Directs site the VWAP is 6.5

I only looked at the NZX site when posting before.

So who would want to buy this doggie even at a discount?

Another month before the full year results.

Hopefully there will be some good news in there? It is slightly hard to imagine this considering how high the dollar was for most of last year.

Who thinks there will be another capital raising this year?

[Zito]

My guess is someone was desperate to sell and 6.5c was all they could get for them. This is 'smart money' selling out and making a loud statement whilst doing it. Small investors ought to be listening.

SP 8c at close which is a new 2yr low....reconfirmation of downtrend after brief trading range.

[Zito]

SSH from AXA this morning that they have reduced their holding from 7% to below 5%....I guess they see this investment for what it is as well. The writing has been on the wall for some time.

Of course now that they are no longer SSH any further selling by them is not subject to disclosure. I would not be startled to see further selling pressure if AXA see fit to exit altogether.

[Anna Naum]

SSH from AXA this morning that they have reduced their holding from 7% to below 5%....I guess they see this investment for what it is as well. The writing has been on the wall for some time.

Of course now that they are no longer SSH any further selling by them is not subject to disclosure. I would not be startled to see further selling pressure if AXA see fit to exit altogether.

Suggest it is because of the breakup of AXA NZ, some will now be run by AXA from AU and the rest is being run by Harbour Asset Management, the old NZ team from Axa.

[Lizard]

No FY report yet? Tut, tut...

[Footsie]

out now... just

[sharer]

WDT 01/03/2010 FLLYR REL: 1044 HRS Wellington Drive Technologies Limited FLLYR: WDT: Full Year Results Announcement Wellington Drive Reports Annual Results Revenue increases 54% but final result down on Prospectus Auckland, 1 March 2010, Wellington Drive Technologies today announced its financial results for the year ended December 31 2009. Revenue for the year was $22.4 million, up from $14.5 million in 2008, although below the $40 million forecast in the company's January 2009 Prospectus. The company's bottom line loss was $14.7 million before foreign exchange losses. Revenues were up 54%, and sales of motors to the commercial refrigeration sector, principally for soft drink bottle coolers and supermarket refrigerated display cabinets, rose 105%. Final outcomes for the year were in line with guidance given in November at Wellington's EGM. The company's Chairman, Dr Rick Boven, said sales growth is expected to continue the upward trend shown this year, particularly to purchasers of motors for commercial refrigeration in North America, as well as expected first major sales of ventilation motors in Europe through Wellington's OEM partnership. "Our budget for 2010 projects significant reductions in losses and growth in revenues. The year has started positively with strong order flow in commercial refrigeration and ventilation. Indeed, some sales are currently more constrained by ability to supply than demand, and certainly for at least the first half of 2010 it appears demand will be above budget projections," he said. "Wellington is well funded and it remains the Board's intention to move to break-even without further capital raising." Wellington sold over 600,000 motors during the year, principally to large companies in North America and Europe progressively shifting to new generation energy-efficient motors. Dr Boven said the loss was disappointing and the company remained focused on moving to profitability as soon as possible. As well as building its international refrigeration and ventilation businesses it will continue to make and closely monitor savings in operating expenses and bring to market a range of six new motors whose development costs were incurred last year. The company's annual report is posted on the NZX website and at www.wdtl.com Wellington performance and operational highlights for 2009 - Total sales up 54% - Commercial refrigeration sales up 105% - $22 million in new capital raised - Hunter Hall Investment Management becomes cornerstone investor - Over 600,000 motors sold and delivered internationally - Shipments to Imbera (formerly Vendo de Mexico) increased substantially - Expansion of manufacturing and logistics centre in Singapore - Six new motors developed. High volume production initiated in China - Agreement with single global logistics contractor

[sharer]

Sorry about the clumsy looking post - but the contents of the annmt are all there.

Something seems to destroy or interfere with the formatting, so simple copy & paste doesn't work as before. After wasting a half hour i just gave up on it.

[Lizard]

The slightly surprising part about that result is that when compared with the $10.4m operating cashflow deficit in the first half, the full year op cash deficit of $10.1m suggests they were actually slightly cashflow positive in the second half... even if it was achieved by working capital management ($4m squeezed into payables, $3m from inventories, less a mere $0.6m soaked up by receivables). Good to see the cash from last cap raising remains intact, although the gross margins still only appear to sit about 10% in second half. It's going to take more drastic change in sales, margins or operating costs if the (long talked about) maiden profit is ever going to be booked.

[winner69]

Revenue for the year was $22.4 million,below the $40 million forecast in the company’s January 2009 Prospectus

Get their forecast a bit wrong did they?

One day, maybe, one day they'll come right

But what the heck ... star performer today .... up 15%

[emearg]

They changed their revenue estimate in June 2009 to 33.7 million. Obviously they missed that rather badly as well.

These guys are terrible at forecasting.

I hope to see some buying from the directors over the next wee while. That helps to make me feel better about my holding, but I still feel pretty worried despite their ongoing optimism...

[kiwi_on_OE]

The forecasts made last year were: -

Jan - rev 40m, net (2.9m)
Jun - rev 33.7m, net (11.4m)
Aug - rev 27-30m, net (14.5-14.8m)
Nov - rev 23m, net (14.5m)

At least they almost managed to meet the forecast they made in Nov! I'm wondering why they referred to their Jan 09 forecast, they could've referred to any of them from last year, or indeed none of them. Could they possibly be doing it to make their results look worse so that they can buy some more shares while they're cheap?

The closest thing to a forward looking stmt is: -
'The year has started positively with strong order flow in commercial refrigeration and ventilation. Indeed, some sales are currently more constrained by ability to supply than demand, and certainly for at least the first half of 2010 it appears demand will be above budget projections'.

I don't think they've published any budgets, not that they could be believed anyway, but it might've been interesting to know what their sales are so far this year.

Personally, I'm thinking sales near 40m, and a loss closer to 0 than it is to this years loss, maybe something like the forecast in Jan 09.

[winner69]

The forecasts made last year were: -

Jan - rev 40m, net (2.9m)
Jun - rev 33.7m, net (11.4m)
Aug - rev 27-30m, net (14.5-14.8m)
Nov - rev 23m, net (14.5m)

At least they almost managed to meet the forecast they made in Nov! I'm wondering why they referred to their Jan 09 forecast, they could've referred to any of them from last year, or indeed none of them. Could they possibly be doing it to make their results look worse so that they can buy some more shares while they're cheap?


They were compelled to state performance against the Jan 09 performance because that forecast was in a prospectus to raise capital

Punters put money into the business on the basis of that forecast

Outrageous eh

But good on you for your continued optimism

First time in ages I have seen a company say they can't keep up with demand .... makes a good story eh .... but sort of suggests a bit of a ongoing production problem if sales are to double

[Nevl]

Yeah the biggest disappointment was the cancelation of the TI project with Panasonic and that accounts for the shortfall in revenue. So far 3 out of the 5 major TI projects have led to no sales. Still just one of these projects coming through will be enough to double sales for WDT.

Still the question to be asked is why are the TI projects not leading to sales? Is it because of the recession in which case these projects will just be delayed or is there a comprehensive failing in the technology that means customers are not convinced. If the second then why are the refrigeration sales doing so well. So who is right. Impera or Panasonic? Anyways another upbeat report and nice to hear sales are ahead of budget. Wonder how Arcelik sales are going as well? I think WDT needs to start letting us know a bit more. The confidentiality clauses are just going on too long and are not helping.

[xpress]

Yes, it is always frustrating when the deals don't eventuate! It appears to me that one of the reasons that they don't progress is that WDT are not prepared to give away their intellectual property. It sounds like the latest project was delayed rather than terminated. After saying a few months ago that the production facilities were now set to produce basically unlimited units, it seems odd that they are still limited by production. But I am still a fan and remain positive (and as you have probably guessed I am still a shareholder!)

[Nevl]

Agreed that they should not give away IP but when they are being strung along over 18 months then they need a backup plan or a break clause that allows them to be compensated. Also what product was Panasonic developing? Should WDT produce its own version of this product using its superior EC motors and compete directly or sell to Panasonics competitors. WDT seems to relaxed and waiting for things to happen rather than going out and making things happen. Ok I know cash burn is an issue and maybe this will change but I still despair over the lack of ambition shown.

[xpress]

Fair enough. In their defense they did generate quite a bit of revenue last year from joint venture development of new motors - and have spent big money changing the whole business model to build the motors after they realised that it was harder to "hook" clients into using the IP. Producing the motors in China may have a huge benefit. We might (finally) get some exchange rate benefits soon, and China has to potentially be the most exciting market in the world at the moment. I still think this company has the ability to do really well - it's a matter of "when" not "if" for me.

[Nevl]

Yeah problem with dealing with China though is now your IP is their IP. As soon as you set up a factory they are stealing all your IP and going through your emails. So WDT really needs to get moving and only use china for the basic commodity stuff. Anything high end must be kept in NZ or Singapore.

Still one decent announcement and WDT will do well.

[emearg]

I note that Total Integration has been dropped from Wellington's website. Another bright idea that hasn't come to much which is a real pity!

A couple of the directors have been buying over the past few days. As always it is nice to see the directors showing confidence with their cash and not just their positive words...

Maybe something will come of Wellington given another year?

[Nevl]

Maybe something will come of Wellington given another year?

Yeah another year being the operative word. But like Xpress I am more confident about WDT this year though I bag the company I still feel that the Technology is a no brainier and think they will hit the 1mill motors this year. Also I think that one of the big TI projects will come to fruition.

Ok there I have made 2 predictions. Lets see if I am right. 90000+ shares and holding.