That sinking feeling
Poor Poolcop sales put project in deep water
BELATED FINANCIAL statements for the year to endOctober 2007 show that unlisted venture capital contender APMI Holdings – the developer of the much-hyped Poolcop swimming pool maintenance system – is sinking. APMI was one of the new brigade of unlisted venture capital companies – including Vinguard and Lazeron, as well as revamped projects such as Agave Distillers and Supertow International – that plied the public for funding between 2005 and 2006 (see box).
Like its counterparts, APMI promised big returns to investors who participated in a public placement of shares, which raised R16m for APMI in early 2006. At that point Finweek and Fin24 pointed out that the inferred value of APMI was R100m – which looked far too generous for a start-up venture marketing a highly niched product.
For its past two financial years, APMI’s turnover collectively topped R6m – a truly insipid performance considering that amounts to less than half the capital raised from shareholders in 2006. Turnover of R3,4m for the year to end-October 2007 translated into a loss of R4,4m. That’s a far cry from the prospectus forecasts that sales for the period were expected to top R24m and yield taxed profits of R4,7m.
The lack of sales is ominous, especially if shareholders recall the upbeat statements from APMI CEO Gustav Lotz towards end-2006. In the company’s third quarter newsletter of 2006 there were excitable references to “hectic” offshore activity and “reaping the fruits of continuous marketing and branding” in SA.
While year-end 2006 is a long time ago, we must remember Lotz was talking about APMI’s performance reflected in its most recently finalised financial statements. In that newsletter Lotz predicted a major sales boost, referring to a pending transaction with Pentair Europe and a contract with a hardware group in SA. That, claimed Lotz, would increase sales in SA to the value of R5m and R10m internationally for the year to end-2007 – an increase of 600%.
Scanning its pitiful income statement for the year to endOctober 2007 you might not be surprised if shareholders accused Lotz of a reckless rant.
Questions were emailed to Lotz last week to establish why exactly APMI had fallen so far behind its projections. At the time of writing no response had been forthcoming.