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Deal fires up DataDot

29jun05

DATADOT Technology is on the brink of signing a multi-million dollar contract with chemicals and explosives company Orica -- which could explain why DataDot's share price spiked yesterday.

Shares in the company, which creates anti-theft and anti-counterfeiting technologies, shot from 22.5c to 31c when the market opened yesterday.

The price rise prompted a "please explain" from the stock exchange. However, DataDot said it had nothing to disclose to the market.

The shares closed 29 per cent higher at 29c on heavy turnover.

It is believed that DataDot's latest branding technology, developed in partnership with CSIRO, will be used to identify Orica's ammonium nitrate products, the same type of explosive used to blow up New York's twin towers.


Known as DataTraceDNA, the technology is based on "luminescent microparticles" which can be added to a range of products and materials.

DataDot has a perpetual, worldwide, exclusive licence to exploit the technology across various applications.

Chief executive Ian Allen described the market for the technology as "unbelievable".

"We are talking to companies (about the technology) and I said that in the company's prospectus," Mr Allen told the Herald Sun.

When asked if the company was talking with Orica, Mr Allen said: "I can't say."

In Orica's case, the technology could be used for inventory control -- to specifically identify each batch of explosives so, for example, the source of stolen goods or counterfeit products can be identified.

Media giant Time Warner is believed to be keen to explore the technology's application for preventing CD pirating while Caltex is looking at how DataTraceDNA could be used inside the plastic coating of containers to prevent oil being counterfeited.

Companies as diverse as mobile phone company Nokia and coat hanger outfit Spotless are believed to be prospective buyers of the technology.

DataDot is better known for its DataDotDNA laser-etching technology which protects luxury cars from theft.

Thousands of microscopic dots holding identification information are sprayed on to different parts of cars, motorbikes or boats.

DataDot raised $10 million and floated on the stock exchange in January at a 72 per cent premium to its 25 issue price.

Since then, investors include retail boss Gerry Harvey have watched the stock sink to as low as 18.5 earlier this month.

In May, the company lowered its outlook for the year to June 30, citing expectations of a $2.5 million loss before interest and tax compared with prospectus forecasts of breaking even.

It said second-half trading had been consistent with the first-half although a number of significant contracts were yet to be finalised and would not contribute to full-year earnings.