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Australian Financial ReviewWED 02 JUN 2010, Page 55

ASG finishes acquisition drive


By: Paul Smith

The chief executive of listed technology services player ASG, Geoff Lewis, yesterday said the company would put away the cheque book for a while and concentrate on driving value from its rapidly expanding business, after completing the $50 million acquisition of consulting group Capiotech.
The deal is the largest of three acquisitions completed by the group since March, as part of a plan to bulk up its skill base and expand its geographic footprint on the East Coast.
It also acquired Dowling Consulting in March and SAP specialists Courtland Business Solutions at the end of April.
Capiotech specialises in analysis, design, testing and implementation of business intelligence, and worked alongside ASG to land a five-year application support deal with Qantas last year.
Buying the company gives ASG access to its impressive roll of clients, including ANZ Banking Group, Commonwealth Bank of Australia, National Australia Bank, Macquarie Group, Vodafone, Origin Energy and CSL. "We see business intelligence as a strategic part of our growth plans, obviously all the big vendors agree, given the number of recent acquisitions," Mr Lewis said.
"A lot of their customers we only have very small, if any, relationships with. So we are looking to exploit that to grow our business; we see it as a big strategic opportunity to be able to sell ASG capability to their customer base."
Mr Lewis said opportunities were already emerging from the two earlier acquisitions, and the company focus would now switch inward.
"There is a lot of work to be done and I am ultimately responsible, strategically to pull this together. But the organic customer wins recently as well as these accretive gains position us very strongly for FY11 and 12."
Director of investment firm Moelis and Company, Todd Guyot, said the acquisition would be 15 per cent earnings per share accretive in 2011, and added to an already impressive growth profile for the next two years.
Mr Guyot had viewed the stock as a good buy for some time as a safe long-term bet because of its high percentage of recurring revenues.
"I would suggest that even if they didn't do another thing after today their growth profile in FY11-12 would still be very positive.
"They are in very good shape now, they have basically got the growth platform they need for the next couple of years. They have won $112 million of new work since the start of FY10 and there is still a pipeline where they reckon they can win a similar amount in the second half."

KEY POINTS
ASG now has an impressive list of major clients.
Growth over the next two years looks strong.

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The Australian, Edition 5 - Extra Tabloid
FRI 26 MAR 2010, Page 011

Map reveals big picture


By: DAVID BINNING


Click here to search for full page image in PDF format

An Australian venture is helping companies extract value from their bulging data files

IN the early 1990s, exhaustive investigations by NSW police into the disappearance of several foreign backpackers had hit the wall.
At a loss for new leads, senior officers were ready to try anything when they were introduced to a little known Sydney software company that claimed to have developed a unique system for revealing hidden and unusual relationships within larger repositories of disparate data.
A spin-off from the University of Technology, Sydney, NetMap Analytics took the information that had been accumulated, including criminal records, gun licensing and road authority information, and profiles of several hundred possible suspects.
It used software to present that information visually using a variety of shapes and colours, enabling investigators to picture hidden relationships between different groups and sets of data.
Soon they were able to arrive at a short list of 34 people, one of whom was Ivan Milat.
According to NetMap managing director Peter Anderson, the company has an impressive track record of helping police, insurers, retailers and governments better identify and respond to fraud.
In addition to the high-profile backpacker case, it has helped AUSTRAC spot money-laundering activity and Westpac combat credit-card fraud.
And it was instrumental in linking a complex, high-profile, insider-trading scam to a now disgraced Macquarie Bank executive.
Not bad for a company with only eight staff.
But during the past few years, NetMap has begun to realise that crime doesn't pay enough on its own and is now taking its data-sleuthing smarts to the more lucrative corporate market.
For the past few years, organisations have been struggling to manage a truly staggering increase in commercial and corporate data stemming from things such as online forms and transactions, digital mobile communications and social networking sites.
``The datasets now being collected are becoming increasingly, exponentially enormous,'' Anderson says.
Data analytics, often referred to as business intelligence, is emerging as an important subset of the IT industry, attracting many of the world's largest and most powerful technology companies.
Ironically, it was one of the few areas of the IT&T industry to have remained buoyant in the aftermath of the global financial crisis, something it very well could have helped to avert.
For its part, NetMap has an important role to play in helping organisations gain a clearer understanding of their myriad components and how they might operate and interact more effectively, Anderson says.
He says customers are invariably surprised at what they discover, often realising they weren't asking the right questions.
Knowing this is one of the big challenges of marketing, which is where NetMap initially expects to have the biggest effect in the corporate world.
``Where this solution could be very powerful is if you're looking to analyse those organisations with large customer bases, or marketing organisations looking to target the most cost-effective way to approach a market,'' Anderson says.
The company helped a large Australian pharmaceutical distributor recently to convert data from thousands of surveys of doctors into useful market intelligence, using its technology to ascertain the key individuals, or influencers, within the community.
The company was then able to run a more focused marketing campaign at lower cost.
Of increasing interest to marketers, Anderson says, is how to extract market intelligence from social networking sites.
``The emergence of the net and social networking environments creates a whole set of social interactions that really is a repository of data that hasn't existed before,'' he says.
``More attention is now being given to tapping them to better understand market trends.''
But this isn't as easy as it may sound.
Although marketers are all in a lather about the untapped potential of sites such as Twitter and Facebook, the large numbers of members makes it a herculean task.
Facebook, for instance, has more than 300 million members, almost as big as the population of the US.
Unperturbed, Anderson believes NetMap's unique ability to tackle data challenges of this scale and complexity could see it become one of Australia's most important technology companies. At present, the bulk of the company's $5 million or so in annual sales comes from Australia, but it is making important inroads overseas.
The British government is in the early stages of deploying NetMap in a bid to crack down on welfare fraud, and in the US a number of insurance organisations already use the technology to detect fraud.
NetMap also has distributors in South Africa and Malaysia.
But Anderson acknowledges that he has a steep uphill climb before NetMap can become a genuine global player.
After all, it wasn't so long ago that the company began as a series of squiggles on a university whiteboard.
``It's about evolving this business out of being a very tightly bound niche piece of science into a broader range of commercial opportunities,'' he says.



IN BRIEF
Following a minor exodus from its senior ranks last year Google started analysing data to predict when staff
may be about to leave, even before they had thought of it themselves

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Sydney Morning Herald Sydney Morning Herald, Edition 1
WED 19 MAY 2010, Page B02

Big Jim's new venture is more alluring


By: SCOTT ROCHFORT

The banned company director Jim Byrnes appears to have moved on from his brief flirtation with the toll road sector.
In a sign Big Jim has bounced back from last year's failed class action against the Macquarie-listed BrisConnections, he is now working behind the scenes with the shell of a former lingerie company in its takeover bid for the former MFS satellite and Newcastle Stock Exchange-listed Premium Income Fund.
The German-listed company ALF Group, formerly known as Can Can Lingerie, is the 80 per cent shareholder in the company behind the bid, ALF PIF Pty Ltd.
Among the bidder's directors are the former owner of Can Can, the Sydney businessman and rag trader Michael Pakula, who retains a stake in the listed entity.
The lingerie company has a 50 per cent stake in a Singaporean company that owns a range of Australian businesses, including Big Jim's Australian Litigation Funders and a carbon trading business.
Yesterday the income fund, now managed by Brisbane businesswoman Jenny Hutson's Wellington Capital, urged the fund's long-suffering unitholders to reject the bid. "The offer is grossly inadequate," said Hutson in a statement. The fund reported a $35 million loss for the six months to December 31 and has now written down its assets to about $270 million.
This compares with its almost $900 million valuation on assets before the implosion of its former manager, MFS.

HENRY AD2010
The Treasury secretary, Ken Henry, has provided his strongest hint yet that some of his recent hires could have archaeological experience, judging by the impressive archive of economic data he put on show in Sydney yesterday.
At the opening of his post-budget address to a meeting of the Australian Business Economists, Henry titillated the crowd with a graph on his real gross domestic product projections to 2017. Then came a terms of trade graph dating from 1960 and a less exciting commodities chart. But things again got exciting when Henry pulled out a chart on the real price of copper and aluminium since 1911.
Then out of nowhere, came the chart on world GDP from AD1 to 2003. "For the first 1700 to 1800 of the 2000 years shown, China and India's share of world GDP may have been greater than that of western Europe and the US," explained Henry.
"Two or three centuries ago, their share of world GDP began to decline as the industrial revolution took hold in the West. Only in the last four decades has China and India's share of world GDP rebounded strongly." No GDP projections were provided for the next 2000 years.

TWEET JODEE
Seems the former One.Tel chief dude Jodee "Wingdude" Rich has kept up to date with the latest developments in Web 2.0 jargon in the decade since the collapse of the Sydney-based telco.
"We can say to companies ... hey what are the good things that are being said about you after removing sarcasm, double negatives and double positives," explained Wingdude in relation to a new service provided by his company, PeopleBrowsr.
The Californian firm helps trawl the social networking site Twitter and analyse tweets to help provide feedback to companies or brands. Or as Rich explained, PeopleBrowsr does "a very very deep dive into Twitter analytics".
"We also have this end-to-end link with human sentiment," said Rich in a recent interview with a US website designed "to bring together thought leaders in a variety of disciplines and organisations" called building43.
"The life of a tweet up until today has been very very short. But with annotations and what we're offering with our data mine, the life of a tweet is now going to be way extended," explained Rich, to the obvious excitement of his interviewer. "This thing now is going to persist from being a stream into becoming a cloud."

CHIPPER CHI-X
The Asia Pacific boss of the ASX's new low-cost rival, Chi-X, appeared unflustered yesterday over concerns about having multiple exchanges in Australia. Concern heightened following the recent errant trade on May 6 that lead to the biggest fall on Wall Street since 1987.
Amid pressure some investment houses are putting on the federal government to delay Chi-X's entry into the Australian market, Chi-X Asia Pacific's chief executive, Ronald Gould, argued: "There is some evidence that having more than one venue, if it's handled correctly, can actually be helpful in dealing with the systemic imbalances that can occur sometimes.
"The reality is there isn't a smoking gun here. There wasn't one thing that went wrong and you could say, 'Ar, there it is'," said Gould, in relation to this month's wayward day on Wall Street.
"It's a confluence of a number of different things," he said.
As for all the negative press on high-frequency traders, Gould also argued: "They bring a huge amount of liquidity to markets. It needs to be realised at the end of the day it benefits investors."
Meanwhile, it seems not all of the present or former staff at the ASX are unhappy about Chi-X's entry.
Nomura, which owns Chi-X, yesterday announced that it had hired one of the engineers of the ASX's move into electronic trading, Mike Aikins, as its chief technology officer. The former ASX operative Andrew Walton has been appointed business development manager.
Got a tip? Use our online tips box or email srochfort@smh.com.au

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Australian Financial Review Australian Financial Review, Edition 1
FRI 16 APR 2010, Page 62

Funds for software that learns as it spies


By: Rachael Bolton

A new West Australian venture capital firm has made its first investment, injecting $1.5 million into a locally developed software product that knows when you're up to no good.
Yuuwa Capital was established six months ago after successfully claiming dollar-for-dollar funding under the federal government's Innovation Investment Fund program.
Yuuwa's investment director, Matthew Macfarlane, said the IIF program meant the federal government retained a stake in the firm.
"It's not a grant from the government, they are an investor," he said.
The IIF program first began aiding the establishment of innovation VC organisations in 1998 and is now on its third round of investment.
Yuuwa was the latest successful applicant for IIF funding and has received $20 million in capital to match the amount raised from private investors.
Having first floated the idea for the firm just before the global financial crisis hit, Mr Macfarlane said raising private funds had been tough.
However, Yuuwa was now in full swing and had considered about 90 opportunities, of which four or five were being worked on. The firm's first funding project will result is an algorithmically calibrated software product designed to learn behaviour patterns on video surveillance footage and determine when something out of the ordinary is happening.
The software, which is yet to be named, was developed by researchers at Curtin University.
Development team leader Svetha Venkatesh explained that the software uses a sophisticated mathematical algorithm to observe typical movements of objects within the line of sight of a stationary video surveillance camera and determine when something atypical occurs.
"To define what is not right is very difficult," she said.
"A video is made up of a bunch of still images. We take two images and calculate what is the movement in each scene. The software then learns what is normal motion in that scene."
The software requires one week's worth of video footage to process patterns and "teach" the software standard movement patterns.
Potential applications include monitoring railway stations and alerting security when people are on the tracks or providing surveillance in areas with high rates of car crime.
The product differs from existing video analytics systems, which require the customer to define the events of interest in advance, because it learns on the job and is consequently more accurate.
During a pilot program, the software was able to identify arson attempts, traffic moving in the wrong direction and anti-social behaviour. Professor Venkatesh said it was more efficient and required less monitoring because it could direct attention to the right footage at the right time.
Trials of the software are underway with Belmont City Council in Perth and discussions are also being held with the WA Public Transport Authority.
The product will be commercialised by iCetana, a new company established specifically for that purpose.
Mr Macfarlane has been appointed interim chief executive.
Prior to founding Yuuwa, he worked in the telecommunications and IT industries.
Co-founders Liddy McCall and James Williams come from biotechnology and life sciences backgrounds respectively.
Mr Macfarlane said Yuuwa intended to invest in a mixed array of innovations across these sectors. He expects iCetana to recoup outlay costs and turn a profit within three years.
KEY POINTS
-Yuuwa Capital has funding under the Innovation Investment Fund program.
-The software was developed by researchers at Curtin University.

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Australian Financial Review Australian Financial Review, Edition 1
FRI 16 JUL 2010, Page 29

ASG Group (ASZ)


By: Gillian Tan

Shares make huge leapShares in information technology services provider ASG Group have soared 175.1 per cent in the past year. The company's shares are currently trading at highs that ASG has not seen since January 2008. Between March and June this year, the group acquired IT consulting group Dowling Consulting, SAP software provider Courtland Business Solutions and business intelligence specialist Capiotech. ASG, whose core business is as a selective IT outsourcer and network security provider, has secured a five-year contract with Vodafone Hutchison Australia to supply the telco with corporate IT support services. ASG's chief officer for sales and strategic operations, Murray Rosa, linked forecast earnings growth to new opportunities in both the public and private sector. Mr Rosa said these would have a value of $784 million in financial 2011.

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Australian Financial Review

MON 06 SEP 2010, Page 46

Salmat on selective shopping spree

By: Neil Shoebridge

Hard on the heels of an unsuccessful bid for the Australian division of payment processing company Retail Decisions, Salmat is cranking up its search for acquisitions.

The Sydney-based direct marketing group has appointed a full-time strategic development manager to look for companies to buy and chief executive Grant Harrod said there were "lots of opportunities".

"We're going to stay in our current business of one-to-one marketing, either in the areas we directly operate in or in adjacencies," said Mr Harrod, who joined Salmat from Corporate Express in April last year.

The last big acquisition by Salmat, which includes catalogue distribution and telemarketing divisions, was the $325 million purchase of business process outsourcing company HPAL in late 2007.

Mr Harrod revealed to The Australian Financial Review that the company was one of the underbidders for Retail Decisions' Australian division, which private equity firm Palamon Capital Partners sold to United States-based Wright Express early in August for ?243 million ($345 million).

Salmat bid for Retail Decisions' pre-paid gift card business, not its Motorpass petrol card operation.

"The pre-paid card business would have been a good fit with our existing operations," Mr Harrod said. "We're looking for acquisitions that can be folded into our existing businesses to generate synergies or acquisitions that operate in adjacent areas. Digital marketing and data analytics are two areas of interest."

Goldman Sachs analyst George Batsakis said Salmat needed a big acquisition to drive earnings per share growth over the next two to three years. "The group's operations are relatively mature and it is in a strong financial position to undertake acquisitions," he wrote in a note to clients.

"In the absence of an acquisition, Salmat may look to repay debt or undertake a capital management initiative, for example, a special dividend given excess franking credits of $79 million or 50(cents) a share."

Salmat cut its debt by $33 million to $134.3 million during 2009-10 and generated free cash flow of $72 million, up from $62.9 million in 2008-09. The rise in cash flow was one of the reasons Salmat declared a special dividend of 10(cents) a share, in addition to its 12.5(cents) final dividend. The company's total payout for 2009-10 was 33.5(cents).

"Salmat is a strong cash-conversion business and the board decided to share a bit of the love around to our shareholders," Mr Harrod said.

Salmat shares jumped 14(cents) to $4.04 when its 2009-10 results were announced on August 27. They have since risen to $4.39.

The company's earnings before interest, tax and amortisation rose 17.3 per cent during 2009-10 to $91.2 million, topping its guidance of $85 million to $90 million.

Mr Harrod said the company would not provide 2010-11 guidance until its annual meeting in November, but "our underlying fundamentals are very strong". Credit Suisse predicted 2010-11 EBITA of $98.4 million, while Deutsche Bank forecast $98.8 million.

"The retail sector, which is one of our key categories, is predicting consumer spending will pick up as we head to Christmas," Mr Harrod said.

"Tier-1 retailers didn't cut back on catalogue marketing, but some of the second-tier retailers ? covering sectors such as jewellery, books, leisure goods and so on ? were less active. Now those second-tier retailers are feeling more confident.
"The financial services sector [a key category for Salmat's business process outsourcing division] is feeling upbeat and our customer contact solutions division is still benefiting from the outsourcing of call-centre operations by companies," he said.

Salmat's targeted media solutions division, which includes catalogue distribution, performed strongly during 2009-10. Revenue was up 2.1 per cent to $230.6 million and earnings soared 44.3 per cent to $40.3 million as it improved efficiencies and reduced losses from the digital marketing business Lasoo.