27/04/2006
Calendar 2005 sales from Synchronica, the venture chaired by tech company backer John Gunn, were ahead of house broker Panmure Gordon’s forecast, though losses widened and profits aren't expected until 2007.
The company produces software and servers that provide updates for and synchronisation of mobile devices, such as Pocket PCs and PDAs. The products are aimed at both mobile operators and corporate end-users.
Revenues rose 29% to £3.1m, losses grew from £2.4m to £2.7m, and year-end cash was healthy at £6.6m (there was £5.6m in the bank at the end of March).
Formerly DAT Group, Synchronica has undergone a major overhaul over the past year, switching from a consultancy to a product-led business. This transition is now largely complete and core products, which boast unique features and high security, now have live deployments.
Nevertheless, recent consolidation by big market players has turned up the heat. Nokia bought main competitor Intellisync for $430m at the end of last year and other rivals have received a fillip from VC investment. Synchronica's board concedes that ‘competitors are now better funded’, but believes continual development of the group's unique products will ensure a place in the market.
Chief executive Carsten Brinkschulte’s says the strategy is to focus on organic growth through the development of new products and investment in effective marketing.
Panmure's Myles Davis remains bullish about the company. For 2006, he envisages losses on £4.8m sales, ahead of pre-tax profits of £1.6m from a top line £9.5m by 2007. That places the shares on a lowly forward p/e of 5 for 2007. This may reflect the fact that It is notoriously difficult to obtain patents for this type product in Europe and without this protection, the company may find it difficult to establish a niche if larger competitors latch on. Intriguing, though high risk.
| Market cap: | £9.45m |
| PE Forecast: | 5 |
| Share price: | 26p |
| AIM | £12.98m |
3.62p
|
-0.25p
|
|
| Other company articles: |
| 26/11/2008 |
| 26/09/2008 |
| 11/09/2008 |
| 08/09/2008 |
| 18/08/2008 |
Manage Your Finances
Money, tax and benefits : your official guide.
