Companies: QDG   

CCTV and network video systems supplier Quadnetics has successfully revived itself since dropping from the Full List to AIM in early 2002. Full year results to May 2003 showed a previous loss of £752,000 transformed into a £1.4m profit before tax on sales improved £2.6m to £20.3m. Moreover, subsequent interims to November showed a further rise in first half profits (before goodwill) to £648,000 despite a 26% fall in revenue to £7.1m. This fall reflected management's decision to reduce exposure to 'low-margin sub-contract' work. With its core business now back on track, management has turned attention towards future expansion. A brace of acquisitions have been made in recent months, with up to £6.8m being splashed out on Look, a specialist producer of CCTV systems for bus manufacturers and operators, and a further £1.4m being spent on Coex, which makes similar equipment but for use in extreme environments. Having generated a combined £7.7m of revenue last year, Look and Coex have the potential to transform the scale of Quadnetics business. Now valued at around £35m, the company's future looks increasingly bright. Nonetheless, if you bought in on our original 142.5p recommendation in May 2003, it may now be prudent to pocket at least some of the near 100% profit.