Tech watch

Take recent AIM arrival March Networks, for example. On paper, the Ottawa-based business – which is listed both on AIM and the Toronto Stock Exchange – appears to have everything going for it. Legendary technology entrepreneur Terry Matthews heads the board as chairman, while around £22.5 million sits in the bank, post-flotation. Perhaps most encouragingly of all, results for the nine months to 31 January showed sales surging from C.6 million (£3.2 million) to C.2 million, with a loss of C.2 million transformed into C.5 million of net earnings.

March makes its money supplying a range of visual surveillance solutions to the security industry. Rather than using traditional analogue video recorders, the company’s focus is on digital technology. With this approach chief executive Peter Strom reasons that March can provide greater value to its customers, which are principally large banking and retail chains at present.
‘In the old analogue world you had issues with reliability, principally having to change tapes all the time,’ Strom propounds. ‘We can store about 90 days’ worth of footage [on a digital hard drive] and the information captured is much easier to analyse.’

So far, March’s focus has been on the North American market but Strom indicates that the money raised on flotation will be used to develop the company’s European profile. With a move into the defence sector also mooted, the company is well worth tailing.

TRL fights terrorists

Also advancing confidently is TRL Electronics, supplier of advanced radio and satellite communication systems to the defence and government sectors.
February saw TRL take the rather unusual step of warning that its government communications business had witnessed a ‘temporary slowdown’ and yet strong demand for its technology and counter-measure offerings had more than offset any shortfall.

Operating profits are therefore expected to exceed market expectations for the year to March, enabling the company to gather further momentum on a strong first half performance that saw sales double to £10.2 million and profits hit £1.1 million — before a £4.2 million one-off restructuring charge.

Latest news concerns the launch of DTS, a new lightweight surveillance system designed to assist counter-terrorist efforts. With this technology having been derived from (and tested through) various classified Ministry of Defence projects, TRL director Andy Gath indicates the system ‘has proven deployment performance in hostile environments’ and anticipates ‘strong market demand’.

Trading at 18.8 times anticipated 2005/06 earnings, the shares are by no means bargain basement stuff but TRL should not be dismissed lightly.

Finally, surveillance software and monitoring services business Farsight is worth watching.

Formerly incarnated as The Ninth Floor – owner of football club Swansea City – the company endured a torrid time following its arrival on AIM in October 2000. Since Christopher Thomas became chief executive two years later though, progress has been steady and the latest interims (to November) showed sales increasing 31.6 per cent to £567,000, with losses reined
back from £501,000 to £189,000.

Farsight remains a highly speculative investment and profits are still some way off. Yet the shares could reward brave investors with cash and patience in abundance.