Bombed-out Japanese biometrics business Secure Design needs to regain investor confidence if the shares are to reclaim the giddy heights reached following the group’s listing in July.

Shares in the Tokyo-based fingerprint authentication counter were hit by a shock profits warning in January. Having first flagged up record December trading and assured final figures to December would hit forecasts, Secure Design then issued a corrective update weeks later. December hadn’t been a record month after all, with certain revenues deferred due to a delay in the shipping of a large order and, rather worryingly, ‘a number of orders’ were actually returned in December. Maiden results have since been released, revealing worse than originally expected losses of �690,000 on lower than anticipated sales of �2.24m – the loss per share was 2.47p.

There were numerous 2006 highlights, including the launch of SD-CHAP, which provides security solutions for web servers, and the launch of IS Suite, which allows corporate customers to monitor and record data transfer to and from computers. And the strategy remains intact, with management looking to forge alliances with partners that sell security solutions and also with component manufacturers, so that the group can get its products into expanding markets in Asia Pacific, the USA and Europe, as well as into the Japanese market.

In the longer term, the shares could prove lucrative fare, with the biometrics solutions market expected to rise to $5.74bn in 2010, of which fingerprint recognition technology should represent 44%. However, there’s way too much uncertainty here for us, and we strongly urge investors to avoid the shares until mists clear.

Secure Design KK	AIM	�13.4m	42.50p	0.00p
Click here for interactive charting
Other company articles:
Secure Design			08/03/2007
New Issues Examined by Oliver Haill			08/08/2006
Japanese float buoyant			17/07/2006
Newcomer - Secure Design KK			14/07/2006