Brokers' view: Edison

Analysts Derek Terrington and Dan Ridsdale of paid-for research house Edison like the look of digital TV technology concern Motive Television.

The duo argues that its ‘Television Anytime’ offering provides the ‘free-to air TV broadcasting industry’ with a ‘low-cost, working technology’ and that Motive should benefit from the plans to switch off analogue television globally by 2015.

Describing its smallcap/high tech status as being ‘high risk/high reward’ they argue that drivers for the business will be ‘new contracts’ which will ‘boost profits, cash generation and investor confidence’ For the year to December 2011 the team are forecasting a loss of £2.2 million on turnover of £4.1 million, with Motive forecast to swing into the black in 2012, with Edison forecasting a profit of £100,000 on sales of £7.3 million.

Viva la Revolution!

Edison is also keen on software group StatPro following the recent launch of its new ‘Revolution’ software. Analysts at Edison note that there are plans ‘in place to open an office in Hong Kong in September primarily to market Revolution to prospects in Asia’, noting that cash flow remains ‘strong’ at StatPro.

However following a weaker than expected trading update Edison has cut its forecasts and is pencilling in pre-tax profits of £5.1 million on turnover of £33.3 million for the year to December 2011, rising to profits of £6.1 million in 2012 on revenue of £35.8 million. EPS of 6.3p and 7.1p are forecast for 2011 and 2012, respectively.