Industrea Ltd (IDL)

I read a quite interesting article about IDL this morning. As a result of the report, there are so many IDL shares traded this morning, with the share price going through the $0.40 cents barrier. It even went to $0.41, before profit taking pushed it back down.

Here's the article:

It floated in June 1999, into the hype of the dot-com boom with major backing from Siegfried Konig, one of the more colourful promoters on the Queensland small company scene at the time.

GPS Online, as it was then known – chaired by former federal communications minister David Beddall and with founder Robert Angel at the helm – went well enough for a while. Shares in the group, which was developing global positioning system technology for logistical monitoring and other applications, were issued at 40¢, debuted at 58¢, traded to a high of 62¢ and closed their first day at 50¢. GPS's free options, issued on a one-for-two basis, closed at 17¢. But it was a roller-coaster ride thereafter and after the tech boom went bust it was all downhill, at one point close to oblivion. The shares bottomed at 1.4¢ each.

Recently, however, GPS – renamed Industrea Ltd after a recapitalisation in 2004 – has been acting like Lazarus with a triple bypass. Its shares, which spent most of the four years between 2003 and 2007 below 10¢, closed on Friday at 38¢, after touching 39.5¢ earlier in the week. Industrea's turnaround began in 2004, when Robin Levison, a Kiwi former accountant turned investment banker and broker, was called in by investors contemplating injecting funds into the struggling group as a consultant. Mr Levison had some experience in global positioning systems, including involvement in their application to America's Cup yacht racing.After eight weeks inside the company, Levison advised his investor group he thought it could be saved and sat back awaiting his fee – only to see the investors tell GPS Online they would put in their funds only on a couple of conditions. One was that Levison, who hadn't been sounded out before hand, become managing director. Having just done a presentation on how he believed the group could be resurrected, Levison says he didn't think he could refuse the job.

In August 2004, he put his feet under the chief executive's desk. It was tough for a long time. He had the unhappy task of reducing staff from 48 to 12 and dumping most of the group's research and development projects. And for many months Levison demanded a formal insolvency statement every four weeks and declined a board seat, to avoid any possibility that he may become liable for trading while insolvent. He joined the board only in November 2005.

Levison says he had a clear strategy to Industrea's resurrection, to concentrate on equipment and services for the mining industry and to make sure the company delivered what it promised. Since he took the reins, Industrea has added to the technologies that have survived from the original GPS line-up by making four acquisitions, QVEN (February 2005), Advanced Mining Technologies (December 2005), WADAM (September 2006) and PJ Berriman (November 2006).Industrea's revenue in 2004-05 was $3.5 million. Its pre-tax loss was $1.4 million for the year. In 2005-06, sales were $10.5 million and pre-tax profit $1.9 million. But in the six months to December, the group's sales soared to $30.8 million and it reported pre-tax income of $7.4 million.

When he took on the CEO role, Levison took a base salary of only $120,000, but received 2 million fully paid shares and a large swag of options. And he has accumulated plenty more since, at way below today's prices. Last month, a notice to the ASX showed he held 15.75 million fully paid shares, having just exercised 3 million options at 5.5¢ each. And he retains another 10 million options, exercisable at 20¢.

Shareholders who bought into GPS Online in its float, like this author, are not doing nearly so well.Still, when Mr Levison took the IDL helm, it's market capitalisation was about $2 million. It is now about $220 million.

You can find this article in today's Australian Courier Mail