Sagentia

Product development consultancy Sagentia, whose young chief executive Alistair Brown unexpectedly passed away last April, is looking to narrow its focus in order to accelerate growth.

Essentially a team of highly intelligent and creative inventors working from a large, state-of-the-art shed in Cambridge, Sagentia cooks up game-changing new products for companies. Examples include a digital revolution for train set and Scalextrix maker Hornby, a robotic camera for surgical equipment group Prosurgics and the mobile payments system that Vodafone is currently rolling out across Africa.

The company, whose 2009 results show it made 90% of its £22.6m total revenues through consultancy work, also aims to licence its own inventions to relevant firms and last year agreed licences for its LED technology to Irish retail lighting concern Nualight, for its sensor technology to Germany’s Novotechnik, and will generate income this year from sensors licensed by automatic meter reading group Master Meter. Similarly, new chief executive Brent Hudson, a former Qinetiq man, is optimistic about similar deals to exploit the company's ‘thin-film heating’ technology in areas such as kitchen appliances and hair care.

That revenues fell last year was unsurprising, given the circumstances, while a £3.1m, non-cash write-down of non-core investments dragged Sagentia, which made a gross profit, to an overall net loss of £2.9m. Significantly however, the second half showed great improvement on the first and levels of net debt were scythed from £4.2m to £2.7m.

The group structure now is much simplified, with subsidiaries disposed of, closed, absorbed and diluted. Hudson is thus able to focus his team on its three areas of expertise: industrial, consumer and medical technology and says ‘the majority of the building blocks needed for Sagentia to be a success are in place’.

Sagentia's shares, tipped by Growth Company Investor last April at 16.5p, have recently bounced to a year’s high. Trading at a considerable discount to the 58.7p per share of shareholders' funds on the balance sheet, comprised of freehold land and buildings, they remain very good value.