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[sharechat] CEO's speech to ADV shareholders


From: "simon dallimore" <smndallimore@hotmail.com>
Date: Fri, 23 Jun 2000 10:54:49 NZST


ADV
23/06/2000
MEET

REL: 0959 HRS Advantage Group Limited

MEET: ADV: SPECIAL MEETING OF SHAREHOLDERS - 23/06

Advantage Group Special Meeting of Shareholders, 23 June 2000:  Evan
Christian, Chairman:
Two years ago our share register held 900 people, now it's over 3,700.  Over 
this time we've built up a strong base of institutional support, greatly 
adding to the stability of that register. We have welcomed two major 
institutional players onto our register in the last few months, AXA, and AMP 
Asset Management. They join New Zealand institutions, Armstrong Jones and 
New Zealand Funds and international investors, Quantum Emerging Growth Fund 
and Kingdon Capital Group.  Two years ago this company was the sick dog of 
the New Zealand Stock Exchange, with a market cap of $4 million, red ink all 
over the books and a big question mark over its future. On 1 June this year 
Advantage was admitted to the NZSE 40. That's a significant milestone in the 
history of Advantage. Now there are five analysts who follow our stock: CS 
First Boston, DF Mainland, Merrill Lynch, Ord Minnett and UBS Warburg. 
That's quite a comeback.  They understand, far better than I do, what drives 
business and what role eCommerce will play. I don't profess to understand 
the
finer points of Business-to-Business eCommerce. I'm just an investor who can 
spot an opportunity. But I know that businesses - all businesses, big and 
small - run computer systems to handle orders, inventory, purchasing, 
payments and the like. And in each of these businesses are people who are in 
contact every day with other businesses, talking to other people there, 
buying and selling things by phone, email, purchase order and fax. Buying a 
computer, booking an airline ticket, restocking the office supplies, 
ordering medical equipment - all require information to be fed into computer 
systems
on both sides of the transaction. Now what eCommerce can do is take that
information from one computer system, send it over the Internet to another 
one, check the price of the computer, check that there are seats left on the 
plane, ask whether it's the plastic coated paper clips you want, check that 
the medial equipment is in stock, confirm the order and send the paperwork 
through to dispatch or ticketing. That simplifies the process, streamlines 
it, ands cuts out cost. Does it cut down on staff? Almost never. But it does 
allow people to do better things with their time than chase orders for paper 
clips. And that's what I call progress
Continuing this theme of progress I would now like to briefly discuss the 
resolutions that we'll put before you later in the meeting. These 
resolutions relate to two fundamental planks of our growth strategy: funding 
investments for next phase of our growth and attracting and retaining the 
people who will help us achieve our goals. The recent market meltdown, which 
started on NASDAQ and spread rapidly across the globe has crated a new round 
of opportunities for companies like Advantage. We've weathered the storm. 
We're strong and profitable. And we are now in a great position to acquire 
good businesses at much more attractive prices. We have been rated well on 
our acquisitions to date; we expect now to be able to do as well is not 
better.
In light of this the Board will later this morning seek your approval to
issue shares to fund further acquisitions. We have been extremely selectX in 
our acquisition targets: we've found companies run by smart, passionate 
people with capabilities that complement ours. Since the half-year report 
was distributed to you we've made a number for investments which strengthen 
our position as a leader in e-commerce development in our region.  In March 
we acquired leading Auckland based software development company Aldridge 
Punter Limited. The acquisition represents a major step for Advantage in 
meeting the growing demand for end-to-end e-commerce services. In April we 
increased stake in Advantage Portable Technologies and acquired Australian 
distribution
company, Leopard Systems. Our reason: we want to be able to participate in 
the fast-growing wireless data market. It has great potential and building 
capability there will be key to offering our customers a complete menu of 
e-commerce solutions.  Last month we acquired Campbell Pope and Associates, 
specialists in implementing eProcurement solutions, one of the hot new 
eCommerce areas. This business adds significant value to our existing 
implementation capabilities.  And, it was only on Monday of this week that 
we announced the purchase of New Zealand's second largest reseller of EFTPOS 
terminals, Netco.  The Netco transaction represents a key acquisition of 
core relationships and market share as we get ready to roll out 
Internet-enabled
Point of Sale into the New Zealand market through the launch of ICE
terminals. Our other investment was in the form of a joint venture with 4 
SupplyCorp and Qixel. In May we announced that we would build and operate 
SupplyNet, a Business-to-Business electronic procurement portal and the 
first large-scale electronic marketplace in New Zealand. SupplyNet will 
initially target the estimated $3 billion spent annually on procurement in 
New Zealand by the public sector, aiming to substantially reduce transaction 
costs by building a virtual marketplace based on GSB's brokerage model of 
procurement
outsourcing. This is a venture that starts in the public sector and grows 
from there. We believe that it represents a huge opportunity for Advantage.
I'd like to move on now, briefly, to the other resolutions we will cover
later in the meeting. These relate to our ability to provide fund share
purchase and offer share options to our employees. Currently, over 50
percent of the people working for this company particulate in the Employee 
Share Option Plan or the employee share purchase plan. That's down from 
where it was 12 months ago, and that's because we've grown so rapidly that 
many of the people in newly acquired companies are not yet participating in 
the plans. Time and again stock options are shown to be the single most 
important recruitment, motivation and retention tool available to companies 
in this sector. It allows us to incentivise staff to focus the company's 
efforts squarely onto those developments that are most likely to enhance 
shareholder value.  We have compared various US companies and can tell you 
that, in our sector the norm is for around 20% of the company to be held by 
the employees.
That's certainly not typical of New Zealand companies, and it has been our 
ability to offer such an incentive that has been behind our successful 
recruitment campaign. Advantage continues to operate in a sector that is 
experiencing surging demand. We're building a company that can cope with the 
stresses this brings. We're building a company with strong service-based 
recurring revenues, one that is less volatile than other more speculative 
Internet ventures. And we've now achieved critical mass to ensure we can 
service large corporate customers.      Since we last gathered together, we 
hP grown revenues substantially and maintained good profitability, while 
continuing to invest heavily for future growth.  Going forward we are seeing 
an increasing number of organisations ranging from Small to Medium sized 
enterprises to large multinationals corporations recognise that eCommerce is 
a need-to-have rather than a nice-to-have. In this context the economics
the Internet has created a new economy with new rules and new leaders.
Companies are scrambling to develop e-business strategies and are looking to 
grow revenues and drive out costs by applying e-commerce to their 
operations. For companies and investors alike, eBusiness is no longer a 
discretionary investment.
End
End CA:00057225 For:ADV    Type:MEET       Time:2000-06-23:10:02:58 
Encrypt:Y



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