DUN Laoghaire-based Rapid Technology says it is close to securing an initial contract to provide a prominent global retailer with tens of thousands of point-of-sale units in conjunction with IBM.
The potential IBM deal is estimated to be valued between $10 million (€9.7 million) and $20 million, and the company expects it to lead to further supply contracts with other hardware vendors.
Late last month Rapid's share price on the Dublin and London secondary DCM/AIM markets rose significantly following news of the potential IBM link-up, and this week stockbroking firm Dolmen Butler Briscoe placed a "conservative value" of €3.07 (£2.42) on Rapid shares. Yesterday the shares were trading at €3.35.
Based on the outcome of discussions on a number of potential contracts, chief financial officer, Mr Roger Bannon says Rapid Technology plans to raise additional working capital during the first quarter of the year. In its annual report, published late last month, the board said the company aims to raise at least £3 million (€3.81 million) during this period.
Rapid reported a loss of £2.1 million for the year ended June 30th last, which the company says was in line with expectations. The company is currently recording a cash "burn rate" of £150,000 per month.
Rapid has worked closely on a pilot project with IBM in the last year to integrate its Screenkey terminals with IBM point of sale systems. Working with one of the world's largest retailers, there are thought to be more than one million units of this kind installed.
Rapid is now concluding negotiations with this retailer to deploy the technology, and with IBM to establish a multinational procurement relationship.
By shifting its contract manufacturing from Europe to the Far East last year, Rapid now says it expects a 40 per cent reduction in its production costs.
