This week: A setback for Intelligent Environment, growth prospects for Plant Impact and iPoint-Media misses the point
BGlobal Plc (BGBL 51p/£40.13m)
Smart meter provider, Bglobal, reported its interims to 30 September 2009 with revenues up 116 per cent to £5.8m (H109: £2.7m) driven by an increase in meter installations and that gross margins increased by 7.2 per cent to 33.5 per cent driven by economies of scale and increased operational efficiency. Pre-tax losses were reduced to £0.67m (H109: £2.0m) but significantly the company was able to report that it was generating cash at the operating level from September. Net cash stood at £2.4m at the end of November 2009 following a placing to raise £2.25m in November.
Nick Kennedy impressed us in his debut role as the company?s new CFO with his focus on cash and working capital management and he was particularly proud of his working capital efficiency gains which managed to generate net cash in the period of £450,000 notwithstanding the headline loss. On the trading side the group has won significant new customers including Gazprom, which is making a concerted push to break into the UK energy market by offering an all smart metered solution for business users and it seems there is strong business demand elsewhere for the smart meters with an increasing order book.
The company also looks to be well positioned to take advantage of the take up of smart meters in the residential market with a “future proof” meter that should meet the regulatory requirements when published over the next 18-24 months. The market continues to forecast 2011 pre-tax profit of £4.5m and EPS of 5.7p, which puts it on 9x earnings which looks very attractive in our view given the market potential and operational and financial efficiencies now in place. Smart one, guys.
Geong International (GNG 41.5p/£15.7m)
We write for the first time on this China based provider of enterprise content management (ECM) software and solutions, which last week announced its unaudited interim results for the six month period ended 30 September 2009. Revenue was up 26 per cent to £6.5m (H1 FY2009: £5.2m) and net profit was up 137 per cent to £0.84m (H1 FY2009: £0.36m). The net cash position (prior to fund raising of £2.2m gross in September) at 30 September 2009 was £2.4m and the current order book stands at…