The last time I reported on my holding in Access Intelligence was back in October following a mild profits warning from the company:-
http://michae1mouse.blogspot.co.uk/2013/10/access-intelligence.html
At the end of the post I stated that I might add to my holding on further weakness, and that's exactly what I did at prices around and below 3p.
At the beginning of the month, the company reported their annual results with turnover up 4% at £8.4m, contracted not yet invoiced revenue up 21% to £6.6m, recurring revenue up 9% to £6m at 72% of sales, adjusted EBITDA up 57% to £576,000 and a cash balance of £1.5m.
The company reported a loss, but this is substantially due to the impairment of intangibles, otherwise the operating profit was a modest £77,000.
Over the last couple of years, Access Intelligence has invested heavily in product development to deliver long term shareholder value, and there are signs that the company is beginning to see the benefits of this investment with the number of new contracts that it has signed and the increase in contracted revenue not yet invoiced.
As with Trakm8, future visibility is good since recurring revenues are a significant percentage of sales and the company has strong cash generation. This is a small company which is making steady progress, but is well under the radar of many investors at the moment.
Another attractive feature is it's hugely impressive and wide client base:- BG Group, Debenhams, NHS, Metropolitan Police, AstraZeneca, Investec, Ladbrokes, Met. Office, Centrica, Easyjet, etc. to name just a few.
Following the results Michael Jackson took advantage of the low share price and grabbed £48,000 worth at 3.75p per share. Incidentally, Michael Jackson is former Chairman of PartyGaming plc, Computer Software Group, Planit Holdings and until August 2006 was chairman of FTSE100 company, The Sage Group plc, where he was a Board Director for 23 years and saw the company rise from a market cap of less than £5m to its current valuation of over £3bn.
Maybe he can do for Access Intelligence what he did for Sage Group?
A swish new website went up this week and it's well worth having a good browse:-
http://www.accessintelligence.com/
Sunday, 13 April 2014
Trading statement - Trakm8
Trakm8 released a very encouraging trading update this week indicating that profit for the year ended 31 March was ahead of management expectations. Reassuringly the acquisition, and subsequent integration of BOX telematics into the group, appears to have gone well, and net cash at the end of the year at £0.6m was higher than anticipated.
Most encouragingly, on a like for like basis, Trakm8 orders are up 46% year on year, and the outlook statement indicates that they are now in a strong position to grow faster, and consider further value enhancing acquisitions.
A further caveat to the statement explains that exceeding management expectations this year was "primarily due to elevated levels of increased margin Engineering Services revenues in the final quarter of the financial year. These were very much associated with new projects that although beneficial for the results to 31 March 2014, will be predominantly delivered in the current financial year."
The trading statement also says that "the outlook for the current financial year is more positive than at any time in recent years."
Trakm8 is still a small company, and of course there are inherent risks and potential banana skins as it strives for rapid growth. However, I am very encouraged by their progress to date, and so far the management team have put in an impressive performance. Growth is being achieved through a measured approach without stretching the balance sheet. Comfortingly this is a high margin business with a high percentage of recurring revenues and strong cash flow. Interestingly, although the new financial year has just begun, I noted that future visibility means that management already expects the Group to achieve an improved trading performance in the new financial year, in line with their existing expectations.
On Friday the share price reached a new 52-week high.
The Director's hold sizeable stakes, and I noticed that at the end of the week an employee bought £21,000 worth out of treasury at a price of 60.25p per share.
Current broker forecasts are for 4.3p to end March 2015 putting the shares on a forward P/E of around 14. Given their impressive growth, and the potential for further value enhancing acquisitions, the share price looks good value to me.
I remain highly optimistic about Trakm8's future and shall continue to hold for the foreseeable future.
Most encouragingly, on a like for like basis, Trakm8 orders are up 46% year on year, and the outlook statement indicates that they are now in a strong position to grow faster, and consider further value enhancing acquisitions.
A further caveat to the statement explains that exceeding management expectations this year was "primarily due to elevated levels of increased margin Engineering Services revenues in the final quarter of the financial year. These were very much associated with new projects that although beneficial for the results to 31 March 2014, will be predominantly delivered in the current financial year."
The trading statement also says that "the outlook for the current financial year is more positive than at any time in recent years."
Trakm8 is still a small company, and of course there are inherent risks and potential banana skins as it strives for rapid growth. However, I am very encouraged by their progress to date, and so far the management team have put in an impressive performance. Growth is being achieved through a measured approach without stretching the balance sheet. Comfortingly this is a high margin business with a high percentage of recurring revenues and strong cash flow. Interestingly, although the new financial year has just begun, I noted that future visibility means that management already expects the Group to achieve an improved trading performance in the new financial year, in line with their existing expectations.
On Friday the share price reached a new 52-week high.
The Director's hold sizeable stakes, and I noticed that at the end of the week an employee bought £21,000 worth out of treasury at a price of 60.25p per share.
Current broker forecasts are for 4.3p to end March 2015 putting the shares on a forward P/E of around 14. Given their impressive growth, and the potential for further value enhancing acquisitions, the share price looks good value to me.
I remain highly optimistic about Trakm8's future and shall continue to hold for the foreseeable future.
Saturday, 22 March 2014
UBC Media, Trakm8 and Synety
On Monday UBC Media confirmed the reports that had appeared in last Sunday's Telegraph.
They have now signed Heads of Terms with 7digital, outlining the detailed material terms of the potential acquisition of 7digital by UBC. A period of exclusivity exists up to 4 April. Whilst UBC's shares remain suspended until the end of May or the deal falls through, shareholders should at least receive more detail on the acquisition in two or three weeks time. The aim of the merger is to create a new public company via 7digital which will be perfectly placed to exploit the rapidly developing market for online and mobile music services.
Potentially, the new entity could be very exciting, particularly if 7digital can maintain or even improve upon it's current growth rate. 7digital have grown revenues 289% over the past five years:-
http://about.7digital.com/news/7digital-ranked-deloitte-technology-fast-500-emea-2013
In the same announcement UBC revealed that Audioboo is also to list on Aim via a reverse takeover of One Delta. UBC shareholders will retain a 20% holding in the company should the reversal successfully go ahead. Audioboo currently boasts 2.3m registered users, up from 600,000 less than 18 months ago.
It will be interesting to see the market reaction to Audioboo's listing where its initial market cap. will be modest in the extreme when compared to the multi-billion dollar listings of the big name social media sites such as Twitter and Facebook.
Also of interest will be whether Audioboo or 7digital lists first (assuming either go ahead as planned)? Of course if it's Audioboo and they receive a positive response, it will have a material impact on sentiment when 7digital lists.
As a shareholder in UBC Media, I am hoping for a positive response to the developments and remain cautiously optimistic. I await further details.
Trakm8 released news of a further contract win this week from a leading UK wireless security and safety provider with a significant hardware order to manufacture remote wireless
fire monitoring products.
The contract is a £680,000 hardware order for remote wireless fire monitoring units with all of the revenues expected in their next financial year commencing 1 April 2014. This hardware order is part of a recently signed supply agreement that is expected to lead to revenues in excess of GBP1m per annum.
This RNSNON may have been missed by many investors, and the company probably still lies well below the radar of many investors.
Significantly, John Watkins, Executive Chairman of Trakm8 commented:
"The scale of this order also underpins our financial expectations for the coming year."
I have high hopes for the future of this excellent little company that is still only valued at around £16.5m.
Finally, Synety released their full year results on Friday which show remarkable growth, albeit from a low base. Whilst this is a highly speculative investment, the signs at this early stage look very encouraging, not least their constant referral to accelerating growth, and 'pushing on an open door' when referring to sales. This confidence has now been backed up by the company promising to provide quarterly updates regarding their KPIs (Key performance indicators). The next one due in less than three weeks time.
Particularly exciting is their entry into the US market where they already have a number of customers using CloudCall. They appear to be 'pushing at an open door' here as well, and I certainly don't recall having invested in any UK company before where US customers are pulling them into their territory.
Early days still with Synety, but potentially very exciting.
At the same time that Synety announced their final results, they also announced a fund raising for £5m through a placing and open offer. The placing and offer is at £2.50 per share which may have appeared a steep discount to the prevailing share price on Thursday evening. However, perspective is everything, and since you could buy the shares at £1.50 or less in the open market less than five months ago (as I did) then to be able to place shares to institutions at a 67% premium to this price in such a short space of time gives you some idea of the rapid progress and confidence they are building. Quite frankly if any company I hold shares in needs to raise capital at a double digit premium to the price I paid just a few short months ago then I'll be quite happy. Of course I always prefer companies to grow without the recourse to capital raisings and the subsequent dilution, but in cases such as Synety's it's a necessary evil. Besides, whilst the share price initially dipped in response to the fund raising, by the end of the day the bid price was back to where it started as investors concentrated on the more important growth figures and outlook statements that had been reported.
I shall continue to hold my shares in this company, and share the Directors confidence in the future.
They have now signed Heads of Terms with 7digital, outlining the detailed material terms of the potential acquisition of 7digital by UBC. A period of exclusivity exists up to 4 April. Whilst UBC's shares remain suspended until the end of May or the deal falls through, shareholders should at least receive more detail on the acquisition in two or three weeks time. The aim of the merger is to create a new public company via 7digital which will be perfectly placed to exploit the rapidly developing market for online and mobile music services.
Potentially, the new entity could be very exciting, particularly if 7digital can maintain or even improve upon it's current growth rate. 7digital have grown revenues 289% over the past five years:-
http://about.7digital.com/news/7digital-ranked-deloitte-technology-fast-500-emea-2013
In the same announcement UBC revealed that Audioboo is also to list on Aim via a reverse takeover of One Delta. UBC shareholders will retain a 20% holding in the company should the reversal successfully go ahead. Audioboo currently boasts 2.3m registered users, up from 600,000 less than 18 months ago.
It will be interesting to see the market reaction to Audioboo's listing where its initial market cap. will be modest in the extreme when compared to the multi-billion dollar listings of the big name social media sites such as Twitter and Facebook.
Also of interest will be whether Audioboo or 7digital lists first (assuming either go ahead as planned)? Of course if it's Audioboo and they receive a positive response, it will have a material impact on sentiment when 7digital lists.
As a shareholder in UBC Media, I am hoping for a positive response to the developments and remain cautiously optimistic. I await further details.
Trakm8 released news of a further contract win this week from a leading UK wireless security and safety provider with a significant hardware order to manufacture remote wireless
fire monitoring products. The contract is a £680,000 hardware order for remote wireless fire monitoring units with all of the revenues expected in their next financial year commencing 1 April 2014. This hardware order is part of a recently signed supply agreement that is expected to lead to revenues in excess of GBP1m per annum.
This RNSNON may have been missed by many investors, and the company probably still lies well below the radar of many investors.
Significantly, John Watkins, Executive Chairman of Trakm8 commented:
"The scale of this order also underpins our financial expectations for the coming year."
I have high hopes for the future of this excellent little company that is still only valued at around £16.5m.
Finally, Synety released their full year results on Friday which show remarkable growth, albeit from a low base. Whilst this is a highly speculative investment, the signs at this early stage look very encouraging, not least their constant referral to accelerating growth, and 'pushing on an open door' when referring to sales. This confidence has now been backed up by the company promising to provide quarterly updates regarding their KPIs (Key performance indicators). The next one due in less than three weeks time.
Particularly exciting is their entry into the US market where they already have a number of customers using CloudCall. They appear to be 'pushing at an open door' here as well, and I certainly don't recall having invested in any UK company before where US customers are pulling them into their territory.
Early days still with Synety, but potentially very exciting.
At the same time that Synety announced their final results, they also announced a fund raising for £5m through a placing and open offer. The placing and offer is at £2.50 per share which may have appeared a steep discount to the prevailing share price on Thursday evening. However, perspective is everything, and since you could buy the shares at £1.50 or less in the open market less than five months ago (as I did) then to be able to place shares to institutions at a 67% premium to this price in such a short space of time gives you some idea of the rapid progress and confidence they are building. Quite frankly if any company I hold shares in needs to raise capital at a double digit premium to the price I paid just a few short months ago then I'll be quite happy. Of course I always prefer companies to grow without the recourse to capital raisings and the subsequent dilution, but in cases such as Synety's it's a necessary evil. Besides, whilst the share price initially dipped in response to the fund raising, by the end of the day the bid price was back to where it started as investors concentrated on the more important growth figures and outlook statements that had been reported.
I shall continue to hold my shares in this company, and share the Directors confidence in the future.
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