TRANSCRIPTION OF FINANCE NEWS NETWORK INTERVIEW WITH MOBILARM LIMITED
(ASX:MBO) CEO, LINDSAY LYON
James Lush: Hello and welcome James Lush from Finance News Network. Joining us on FNN today is Mobilarm’s CEO, Lindsay Lyon. Lindsay welcome to FNN, can you tell us first of all a bit about Mobilarm?
Lindsay Lyon: Thanks James. Mobilarm is in the man overboard business so what we do is we build technology solutions that detect and then track and locate people that have fallen off, either a vessel or a facility. So man overboard technology is primarily what Mobilarm does.
James Lush: And how long have you been operating?
Lindsay Lyon: Well we’ve been in business for six years. We originally started off in the recreational marine marketplace and then we’ve moved the business over the last four years, exclusively into the commercial marine marketplace. And the reason being is in the commercial marine marketplace, man overboard technology and safety is more about removal of risk from the workplace. In the recreational marine marketplace you share it while you’re competing against a new Shimano fishing reel or a new flat screen Fish Finder, so it’s a completely different value proposition.
James Lush: So how common are these man overboard events?
Lindsay Lyon: Well international basis and depending on what report you read, but in general terms it’s the number one cause of a fatality in the marine environment across the board. If you take commercial fishing, that as an industry is actually the most dangerous industry in the world and I’m sure you’ve seen some of the TV programmes of crab fishing in Alaska and I think there’s a new one, Trawler Man and you can really get a feel for how dangerous those industries are. But they’re very dangerous.
James Lush: So your plans presumably aren’t just to include Australia.
Lindsay Lyon: Oh absolutely not. This is an international business; it’s a brand new category of products. So just like the introduction of seat belts to remove risk in the cars, the introduction of man overboard technologies is a brand new category worldwide. It is being implemented around the world, in fact in the EU now, some countries have mandated. In Spain three years ago they passed a law mandating the use of the technology – an old technology - for commercial fishing fleets. It is I believe, the law is quite specific that if you have a man overboard event and fatality on a commercial fishing vessel, over twenty-five metres in Spain, as a skipper, if they did not have man overboard technology on you’re up for corporate manslaughter.
James Lush: How will that play into Mobilarms?
Lindsay Lyon: Well Spain implemented I think around over four thousand systems and it was all funded out of the EU - EU community funded. Well Portugal and France are all doing the same except countries like France have banned the old technology currently in use in Spain. So Mobilarm’s technology is well and truly out there as the frontrunner to become the standard for some of these industries in preventing man overboard fatalities.
James Lush: Let’s talk about the size of the markets, in particular off-shore oil and gas I presume, is where there is huge potential.
Lindsay Lyon: Absolutely, look off-shore oil and gas is the main focus for Mobilarm and the reason being is off-shore oil and gas have an intense focus on safety. And so if you look at off-shore oil and gas and you consider helicopter transfers to and from platforms on a worldwide basis, it is not common but it is not uncommon, for those helicopters to be ditched in the ocean and then you’ve got a situation of trying to find and locate the survivors on those helicopters. Now we did some trials in the North Sea with Bond Helicopters, one of the world’s largest providers in that industry with BP and we had outstanding results compared to the existing technologies of what we can do, with respect to locating and tracking individuals in a survival situation. So then you’ve got the supply boats, the work boats - Bhagwan Marine for example in the north-west of Western Australia has standardised on the Mobilarm technology as has Neptune Marine. So you’ve got oil and gas work boats, you’ve got helicopter transfers and you’ve got all the oil and gas rigs themselves for working over or on the rig itself. So the market is very large.
James Lush: And how does that compare with say the commercial marine and fishing or the Defence sector?
Lindsay Lyon: Well the Defence is a slightly different one and we most recently, just in the last couple of days, announced a contract with the United States Defence Department where Mobilarm has been awarded a Sole Source Contract to modify a current product to suit their needs for submarine escape and survival. Now submarine escape and survival is a worldwide opportunity as a result of that. The US Navy chaired the NATO Submarine Equipment and Survival Committee and so our expectations are that once we’ve remodified the product to meet their needs, we have an opportunity to provide to all the submarine fleets around the world as well. Then of course you have the opportunity to move into the surface fleet which is significantly larger again than the submarine fleet. In fact a lot of people probably don’t know, but the US Navy has already rolled out man overboard technology across a hundred and fifty of its surface fleet, about five or six years ago using the old technology that’s now banned in France.
James Lush: And I presume if you get the US Navy on board, others around the world will follow suit.
Lindsay Lyon: Well certainly the US Navy is looked at worldwide as a leader in technology and technology adoption. So without doubt our expectations are that, you know, a footprint with the United States Navy would lead to other opportunities with the Defence market.
James Lush: Lindsay you’re looking to list on the ASX in the next month or so, how much are you looking to raise?
Lindsay Lyon: We’re raising $4 million and listing the Company on the ASX and we’re issuing shares at 20 cents each. That’ll result in the Company post listing having a market cap of $32 million and the funds will purely be used to expand sales channels. We’ve actually completed all the product development. We’re now moving to volume manufacturing, in fact we’ve selected a company called Sanmina which is a $2 billion - $3 billion dollar US company. They’re a volume contract manufacturer and so we’ll be working with Sanmina moving the volume manufacturing. And the capital raise will be primarily investment of sales marketing and the building of channels to distribute our products internationally.
James Lush: Of course, any investors going to be looking for profits. When do you forecast some profit?
Lindsay Lyon: Well, if you’re familiar with the IPO and the ASX listing process for early stage businesses like ours, the lawyers won’t let you forecast profits or put forecasts into a Prospectus, so I’m afraid that in this environment I can’t forecast profits now. Clearly the existing shareholders have been supporting the business over the last six years; we’ve invested $15 million to date. We’ll be raising this new capital and listing on the share market, so our expectations are obviously very high as to what we believe we can do with this business.
James Lush: Well let’s see if I can ask you one more question then, where do you see Mobilarm in twelve months?
Lindsay Lyon: Well in twelve months I see Mobilarm with an international platform. By that time we will have delivered the test articles to the United States Navy, so we’ll be in a position to start marketing more aggressively to the other NATO countries. We will have entered some other product categories that are existing in the marketplace, in the Beacon Space and I can particularly name it as 406. We’re looking at the Lone Worker category and the Man Down category which are very complimentary to our core business as it sits today. So I think in twelve months you’ll see a similar business but with more product offering on an international platform.
James Lush: Lindsay, thank you very much indeed. Lindsay Lyon CEO of Mobilarm, best of luck with the float.
Lindsay Lyon: Thanks for the opportunity James, cheers.
