|Glbal Lck Grp
||ORD NPV (DI)
||EPS - Basic
||Market Cap (m)
Real-Time news about Glbal Lck Grp (London Stock Exchange): 0 recent articles
|masurenguy: Some consistent selling of 10K blocks today. There has been no newsflow to prompt these first series of Sells, and the subsequent share price retrace, since their IPO 8 weeks ago.|
|masurenguy: zangdook - their sales to the year end June 2010 were circa £812K with post tax profits of around £52K. However they reported that just prior to their listing in October their Q3 (July - September)
and YTD performance was as follows:
"Between 1 July 2010 and 30 September 2010 the Group continued to acquire more customer contracts and the Directors estimate that for the three months ended 30 September 2010, the revenue derived by the Group was in excess of RMB5.3m recognised on a cash basis. Revenue to 30 September 2010 on a cash basis was RMB14.8m and the Group generated pre-tax profits of RMB1.4m. Cash balances as at 30 September 2010 were approximately RMB3.1m."
Extrapolated this suggests that in the year ending December 2010 sales could be circa £2.1m (growth of nearly 200%) with post tax profits quadrupling to circa £200K. However their growth might just be accelerating at an even higher rate than I am extrapolating. They had cash of circa £300,000 just prior to the IPO and they did not seek any new funds at that time although it is clear that their motive for listing was to provide them with a platform to raise cash at a later date. At their current rate of growth they will probably look to raise some funds in the market during the next 9 months.
With 250m shares in issue, and a current share price of 21.5p, their market cap of nearly £54m looks very rich to me with a triple digit PER. However, with fast growing companies like this it is often very difficult to perceive potential worth from the outside. I love their business model and believe that potentially it could be replicated in many other markets but it is difficult to gauge how competitive it is with alternative options and how profitable it can be as economies of scale are developed.
Consequently I am sitting on the sidelines until I can obtain better visibility here. I think that their pitch to achieve their first public fund raising should provide a lot more insight into their potential growth in sales and profit and that might help to determine a good entry point.|
|masurenguy: Excellent progress since the IPO with the share price up by 35% since listing just under 4 weeks ago !|
|masurenguy: Global Lock secures AIM float
Global Lock Safety (International) has a unique security proposition in the Chinese market and it is joining AIM tomorrow. The concept of providing security for stores and homes is not unusual in Europe but Global Lock is the only firm in China that can offer alarm units, guard response and anti-theft insurance in one package. It took more than three years for the Chinese regulators to permit the link between Global Lock and China Pacific Insurance Company so it could take some time for a competitor to come along. By that time Global Lock should be well on its way to becoming a national brand.
It is difficult for stores to get insurance without a trusted security firm offering them security services. By offering the full package Global Lock can provide a service attractive to retailers. The security equipment is provided free of charge but the annual fee for the service is paid up front. There was deferred income in the 2009 balance sheet of RMB5.21m (£496,000).
The patents for the technology are in the subsidiary's books at RMB38.1m. The equipment is manufactured by a company owned by most of Global Lock's directors. Pro forma net assets are RMB66.3m (£6.3m) but that includes RMB38.3m (£3.65m) of intangibles.
There are currently more than 6,000 customers with in excess of 1,000 added in the three months to September 2010. Global Lock has 50 branches in China, plus hubs for patrolmen. Most of the customers are in Hunan province and Global Lock also has a presence in 10 other provinces. One branch has around a dozen staff plus additional patrol guards. A branch can cope with up to 1,000 customers so there is plenty of spare capacity. Global Lock has set a target of 500,000 retail customers and 1m residential customers by the end of 2014.
The residential side of the business is not as lucrative as retail but it is a big market. Residential charges are around one-sixth of retail charges although the equipment is cheaper. The first 'super' branch was opened in Nantong in collaboration with the local authority. This can handle 20,000 customers, enabling Global Lock to start to build up its residential business. Other 'super' branches will be opened in conjunction with local authorities.
Global Lock made its first profit in the six months to June 2010. 2009 was really the first full year's trading. It made RMB1.19m (£113,000) on revenues of RMB9.71m (£925,000). The business is highly cash generative because customers pay one year's fee upfront. Contracts worth RMB14.2m (£1.35m) were sold in 2009, which was much more than recognised revenues of RMB8.59m (£818,000). The company reported a loss in 2009 but it did generate cash in the period. Cash revenues were RMB14.8m (£1.4m) in the nine months to September 2010.
There was RMB3.1m (£295,000) in the bank at the end of September 2010. No new money is being raised at the time of the introduction to AIM. A placing at 15p a share, raised RMB20m (£1.88m) earlier this month and that share price values Global Lock at £37.5m. The cash will help Global Lock to open 10 more branches before the end of the year. The company will probably need to raise more cash because it wants to open 100 city branches and 14 'super' branches by the end of 2014.
Nominated adviser and broker Allenby has warrants to subscribe for the equivalent of 1% of the company the warrants are exercisable at the lowest closing price in the first week of trading and last five years. Allenby receives a fee of £150,000 for the flotation and an annual retainer of £75,000. The total costs of the flotation are £450,000.
Glbal Lck Grp share price data is direct from the London Stock Exchange