Access Intelligence - interims

Access Intelligence released an encouraging set of figures in their interims this morning with revenues up 6% to £4.2m, contracted revenue not yet invoiced up 25% to £5.5m, and recurring revenue up to £3.0m from £2.7m being 72% of total revenues.

They also recorded a small operating profit of £28,000 before taxes against a loss of £198,000 in the previous half-year.

Cash balances have decreased slightly since the year end to £2.3m from £2.8m due to their previously stated intention to invest in accelerating the growth of the business. Operating activities did generate £0.3m in cash.

Gross margins came in at an impressive 73% up from a healthy 67% last year.

Current trading reads as follows:-

"Despite challenging market conditions, the Group has maintained a strong position in the public and private sectors, with H1 2013 contracted revenue not yet invoiced up 25% to £5.5m (H1 2012: £4.4m), and recurring revenue now representing 72% of the total (H1 2012: 68%).

 

Product innovation remains core to our ability to drive growth in the individual brands, both in their respective markets and as an integrated enterprise solution. This, combined with continued pressure on companies to meet the requirements of external regulators and internal cost management, will continue to drive sales pipeline growth for the Group.

 

The consistent increases year on year in contracted revenue not yet invoiced, our recurring revenue base and investment in innovative product development, demonstrate the Group's long term stability and provide a solid foundation for continued growth."

 

In summary, good solid growth is being achieved and I fully expect the benefits to flow through and become apparent in the medium and long term.

 

I'd expect the company to make a small profit at year end on revenues approaching £10m, if they continue to build revenues in future years then the lion's share of these revenues should fall through to the bottom line and profit growth should be impressive.

 

I feel very comfortable with my investment here, and similar to my investment in Trakm8, will wait patiently for the market to eventually realise the potential.

 

As ever, no advice is intended or given.

 

A week of mixed fortunes for two speculative investments

As I have mentioned in previous blogs, I have made two very speculative investments. One in a company called Angle and the other in Avanti Communications.

This week both reported news on progress.

On Monday, Angle informed the market that

"ANGLE plc (AIM: AGL), the specialist medtech company, is pleased to announce successful results from third party testing of its Parsortix non-invasive cancer diagnostic product on colorectal cancer patient blood."

This validation from the University of Surrey Oncology Group (Surrey) is another key milestone in their pursuit of selling their Parsortix device for research purposes and ultimately for clinical use.

The share price rose in response to the news and continued to rise over the next few days.

According to the milestone chart, next up should be validation from the Paterson Institute for Cancer Research with lung cancer patient blood.

Whilst this is a highly speculative investment, it does appear that things are progressing on track at the moment, and I'll continue to hold.

Preliminary results should be released this month.

If this device does turn out to be as effective and cost efficient as it appears to be then the future could be very promising indeed, not least for the patients that may ultimately benefit from its diagnostic capabilities.

On Wednesday (a day before they had recently announced a trading statement would be released), it was not such good news from Avanti Communications, although the initial pounding that the share price took was more than a bit harsh.

A revenue shortfall of £10m for their year ending the 30th June appears to be the main reason for the sell-off, but the company did become cash flow positive at the operating level in June and has signed contracts with major telecoms and media companies including Vodafone, Technicolor and CNN.

The main worry with Avanti is the large amount of debt that it carries, but the company "is conservatively financed, with a very long term repayment profile on its debts and remains in full compliance with all covenants."

I bought shares in Avanti around the £2.60 mark, and this investment has fluctuated between profit and loss since I have held them.

With this type of company (just like Angle) you have to accept that it's a highly speculative play, a long term game and that you could lose all or most of your money. The hope is that either or both might multi-bag.

As long as you don't bet the house on these type of investments then they can provide an exciting ride.

Some investors would argue that the preservation of capital is the most important dictum in investing and I'd agree. However, if you're a stock picker I'd strongly argue that it's the whole portfolio of shares that you look at and you shouldn't get too hung up about any individual stock losses.

I will remain a holder of both these two companies and would love to see both of them succeed over the long term. Firstly from a selfish point of view, but also both companies have already achieved significant milestones from humble beginnings which is testament to their innovation and entrepreneurship.

I wish both companies well, and will continue to monitor their news flow with interest.

OMG!!!! Murray wins and is this a good AIM opportunity?

OMG!!!! Andy Murray currently holds the US open and Wimbledon titles. Well done Andy!!!!

OMG again!! Is this aim listed company (OMG) worth backing following a recent reversal in it's share price.

I don't own shares in OMG, but it has come to my attention over the weekend through an article in the 'Money' section of the Daily Telegraph and recent Director purchases.

Firstly the article is essentially about AIM shares being eligible for ISAS by the Autumn, and it then goes on to say that Paul Mumford who runs the Cavendish Aim Fund (and formerly the hugely successful Cavendish Opportunities Fund) is a fan of OMG, and he will be backing the recently announced £9m fund raising.

To quote from the article he says "The real reason I get quite excited about this one is that it has developed intelligent, wearable camera technology".

"It's the first camera in the world that's been made like that and will be sold exclusively through Amazon. Remember what happened when Amazon sold Kindle exclusively?"

I also noted that Directors bought £205,000 worth of shares in the fundraising at 29p (the current share price is around this figure).

It would appear that the shares have suffered a bit of a hit following the dilutive placing and open offer, and the mild profits warning that OMG issued with their interim results.

I haven't researched the company properly, and have only had a superficial glance at the moment but it may be worth researching further.

The fundraising was for an acquisition and "to exploit opportunities in the Autographer market".

The interims did show a small loss, but the company was profitable last year with diluted EPS at 1.47p (p/e around 20) . The company seem to be generating cash and have paid a steadily rising dividend since 2005, although the current yield is only around 1.2%.

Cash on the balance sheet was around £4m at the interims and if you strip out intangibles and goodwill then tangible NAV is about £7m. The current market cap. is £21m.

Not a screaming buy for me with those figures, but it certainly merits further research and with the price hovering around the fundraising mark it might just have hit its low point?

I'll put OMG on my monitor and keep a close eye on developments.