Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : BCE Emergis - global e-commerce -- Ignore unavailable to you. Want to Upgrade?

To: sPD who wrote (17)	3/11/1998 11:35:00 PM
From: sPD	Read Replies (1) \| Respond to of 1341

"MPACT's roller-coaster ride takes upswing" Wednesday, March 11, 1998 By ROBERT GIBBENS Montreal Bureau The Financial Post The rapid ride of MPACT Immedia Corp. from early facsimile and e-mail technology to sophisticated electronic commerce and Internet services has been a roller-coaster experience for some investors. But now the ride is smoother, says president Brian Edwards, and that means better results. "In 1996 we saw an untapped market for our software and high-speed transmission network in electronic delivery of mortgage appraisals," he says. "We were early in the game, but we could electronically connect all appraisals to all institutions. That's what gave us the edge." The company worked with U.S. software developer Appraiser's Choice Inc. to digitalize mortgage appraisals, which saves money and reduces approval of a mortgage to minutes from hours or days. Manual appraisals with photographs couriered to lenders are out. An appraiser with a laptop, a digital camera and modem completes the work and hits the button to send it to the financial institution. MPACT's software converts it and transmits it instantly over its network. First MPACT signed leading U.S. mortgage provider Norwest Mortgage Inc. The system started up last November and volume is running above target. This led to a contract with the U.S.'s Freddie Mac (formally Federal Home Loan Mortgage Corp.), one of the biggest providers of mortgage funds in the U.S. with assets of US$137 billion. Now MPACT is jointly marketing the system to other institutions. About 15 million mortgage appraisals are done in the U.S. each year - a market of about US$3 billion. In January, MPACT won a contract from Washington's Employee Relocation Council for a hybrid electronic commerce extranet for its 12,000 industry members. Using a Web-based interface, firms will be able to transmit relocation orders, updates, reports and other information instantly. The rollout is due late this year. For the year ended Aug. 31, 1997, MPACT wrote off $13.5 million of software development, goodwill and other special costs and restructured its Canada-U.S. operations. Because of a string of acquisitions, the company has been profitable only once since fiscal 1994. But it turned a profit in the first quarter of 1998 on revenue of $5.7 million. Edwards is forecasting revenue of $27 million and net income of about $250,000 for the full year. Increased revenue from network services will more than compensate for a relative slowdown in software sales. "With an expanding range of products and the explosive growth of Internet commerce, we target revenue of $100 million in two or three years," he adds. That will be a pleasant turn of events for chairman Rick Renaud and investor Ned Goodman, who holds about 17% of MPACT's shares through Dundee Bancorp. Most recently, Renaud was a director and acting chairman of now defunct investment dealer Marleau Lemire Inc. and Goodman was a principal investor. MPACT shares (IFM/TSE) traded as low as $2.15 last year. But after the annual meeting they rose to $3.45 and two analysts had one-year targets of $4.50 to $5. Recently, the stock hit $5.80, a 52-week high. Yesterday the stock closed at $5.35. Late in February, Rajiv Das, an analyst with CIBC Wood Gundy Securities Inc. in Toronto, said MPACT was a strong "buy" with a one-year target price of $8. The 10-year-old company got its name after merging with MPACT Immedia Systems Inc. of Livonia, Mich., a unit of the U.S.-based Tandem Computers Inc., in 1993. That deal quadrupled sales and MPACT retains a marketing alliance with Tandem, which has a 4% equity stake. In 1995, it bought ISDN Wire Service, a distributor of corporate financial data, and early last year added TotalNet Inc., an Internet service provider with national ambitions. Its CAN-ACT joint venture with Royal Bank of Canada markets an online bill payment, tax filing and payroll system. Publisher GTC Transcontinental Group Inc. has just chosen MPACT's secure purchasing and payment service to handle Internet merchandising. Das points to MPACT's volatile profit record as the main reason its shares are undervalued. He forecasts sales of $60 million in 2000, with network services growing at 60% a year. He expects net income will equal 3› a share in 1998, 25› in 1999 and 39› in 2000. But fast-changing technology and margin pressures from deep-pocketed competitors clearly pose risks, analysts say. Network services should approach 80% of total revenue within two years, providing MPACT with a steadier income stream, so long as volume and margins can be maintained. Steve Arthur of Canaccord Capital Corp. says the market will keep an eye on future acquisitions and MPACT's ability to develop its partnerships and alliances.