14/11/2003
Growth Company Investor has not been a fan of this telematics firm, although that hasn't stopped the shares posting good gains on the back of a string of contract wins and a £4.9m placing through KBC Peel Hunt at 3.5p. Yet it remains the case that our critique of the company - and most pertinently its accounting practices - remain just as valid now as they were. Indeed, it is instructive to find the group's now-displaced house broker Seymour Pierce highlighting the exact same issues - adding that it is 'unable to justify' the currently exalted market capitalisation. Analyst John Beddoe points out that 'Cybit's revenue recognition policy of taking the full amount for its contracts from day one and then netting off the interest cost below the operating line is acceptable practice, but obviously increases the top line and makes EBIT higher', adding that 'a more prudent approach would be to take the net amount received from the finance company into revenue'. The fundraising will help reduce the group's reliance on such providers. Beddoe expects pre-tax profits of £520,000 and EPS of 0.05p for the year to March, followed by £850,000 and 0.09p in 2004-5. Sell.
| Market cap: | £33.3m |
| PE Forecast: | 67.6 |
| Share price: | 3.38p |
| AIM | £2.44m |
32.75p
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0.25p
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| Other company articles: |
| 03/07/2008 |
| 26/03/2008 |
| 09/01/2008 |
| 02/11/2004 |
| 14/11/2003 |
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