Belgravium Technologies and Synety

A very brief update from me this weekend.

Firstly, Belgravium Technologies, a company in which I hold shares.

http://michae1mouse.blogspot.co.uk/2013/08/13-rise-for-belgravium-technologies.html

Belgravium released their final results last week.

In my view the results were encouraging and confirm my conviction that the shares are still cheap.
The bull points are quite straightforward. Adjusted EPS came in at 0.4p putting the shares on a p/e ratio of 12 with an outlook statement that reads positively, " 2014 will prove to be a significantly more successful year". The predicted forward p/e ratio is around 8 for 2014.

The dividend was held at 0.1p giving a current yield of 2.1%, but broker forecasts suggest a doubling of the dividend next year to 0.2p and hence a forward yield of 4.4%.

Significantly gross margin has jumped from 45.3% in 2012 to 49.6% in 2013.

Last year Belgravium acquired a company called Feedback Data which is already contributing to profits with a gross profit £535,000 and operating profit £95,000. The balance sheet remains debt free.

Their quest for organic growth continues, but they do hint at the possibility of further earnings enhancing acquisitions. Given the quick and successful integration of Feedback, I would view this as a positive step should a suitable target be identified.

Overall, I view the results and outlook very favourably and shall continue to hold.

Another company in which I hold shares is Synety. This was a speculative purchase which I reported on back in November.

http://michae1mouse.blogspot.co.uk/2013/11/synety-very-promising-speculative-stock.html

The company continues to deliver on it's promises, and most recently announced details of a significant customer win and CRM integration with SSP.

Simon Cleaver, Executive Chairman of SYNETY Group Plc commented:-

"SSP's customer base includes many large and prestigious companies which are well-known household names. Our partnership with SSP to offer integrated services to this customer base represents not only a huge and exciting prospect, but is also an enormous endorsement for CloudCall and SYNETY."

This is just the latest in a series of extremely encouraging updates from the company.

On pure value metrics, and at this early stage in it's development, you could strongly argue that Synety looks overvalued. However, the company believes that it can "capitalise on its first-mover advantage and land grab a market niche where the Directors believe there is limited competition and significant potential." That's exactly what they appear to be doing at the moment, and although the market cap. at £18.6m may appear expensive, given the current valuations of other companies in a similar space, and Synety's considerable potential and current growth rate, you could equally argue that the shares are undervalued.

I'm certainly hanging on to these for the foreseeable future.