Quadnetics Share Discussion Threads

[latifs100] 11/10/2006 15:12

wen is dividend date.. tia

[jswift] 11/10/2006 10:41

The price seems to be red today, have I missed something

[the analyst] 06/10/2006 16:39

Another good day today.

[the analyst] 04/10/2006 12:27

From the funamental point of view I would have though a forward EV/EBITDA of around 10-14 for the 2007 year should come about at some stage after the next results. That would value the company at around £65-85m (£5m profit x 10-14 + £15m cash in bank expected then).

A £65-£85m market cap is about 400-500p per share.

Means holding on for a while, but once the 390 resistance is broken through there could be some fun.

[the analyst] 04/10/2006 12:03

Nicely gathering momentum, has there been a mention somewhere or the current EV/EBITDA of 5 has been noticed by someone as good value?

[mangal] 22/9/2006 12:24

I gather this has been tipped as a buy in IC today. anyone know what IC says?

[the analyst] 22/9/2006 07:50

The new broker note is out:



Sales forecast upgraded by £5m to £70 for 2007

Forecast EV/EBITDA of 4.2 for 2007

(EV = Enterprise Value - Market cap minus cash in bank)

[the analyst] 22/9/2006 07:47

Cheers CH3.

Hoping that the new broker note comes out next week - it should make good reading as the company beat their forecasts, they have won new contracts and the start to the new year has been strong. Brewin Dolphin stated in their last note that they were being cautious and would revise forecasts after the finals when a little more is known about Q1. So, we should expect the note to come out very soon.

I would expect, that with the new management and board members and the fact that we have a larger company after the acquisition, we will get more market makers joining over the coming year. A company this size should have at least 4 or 5 market makers.

[charterhouse3] 21/9/2006 19:06

Analyst

Well done on getting this new thread going so quickly after discussion on the original thread.

Cannot really add much more to your thorough header.

As I mentioned before (and especially in light of today's performance) there has not been any mention in the media (that I am aware of) so the strength of the share price this week is down to intelligent buying rather than any ramping due to a tip somewhere.

This is excellent news as it would appear that many have realised that the share price is currently at ludicrously cheap levels and we await the interest that a press tip or such like will generate.

Sure there is little chance of growth at the levels which IndigoVision may achieve in the next couple of years but an easily achievable 20% per annum earnings growth over the next few years would suggest that the share price should be trading at a far higher rating.

Obviously with just the two market makers and a small NMS there will be 'Indigo-esque' volatility in the share price but I cannot see any reason why the volatility should not start at least above the 300p mark !!!!

It should be an exciting journey.

CH3

[the analyst] 21/9/2006 18:33

Purely from the perspective of them being in the same sector and both being interested in CCTV / e-surveillance as their primary product/service, just taking a look at the recent headline figures from QDG and IND.

IND Market cap £40m, QDG Market cap £44m
IND Net cash £1.5m, QDG cash > £8m
IND Enterprise value £38.5m, QDG Enterprise value £36m
IND Revenue £7.6m, QDG Revenue £50m
IND Profit £0.44m, QDG Profit £3.6m



The similar market caps, despite the big differenece in revenue and profit are partly related to growth and potential forward growth:

Revenue growth at IND this year was 110%
Revenue growth at QDG this year was 86% (including 7 months with acquisition)

IND broke into profit for the first time
QDG profit growth was 45% this year, growing to £3.6m (EBITDA)

Current year profit growth at QDG expected to be 45% to £5.2m for QDG
No profit growth forecast for IND? >100%+ expected?

[the analyst] 21/9/2006 18:01

New Thread



Just contains the basics at the moment, will add a little more later.

Any suggestions/contributions welcome (but on the other thread please)

[the analyst] 21/9/2006 17:41

A bit more info from the Quadnetics website:


Company History
Quadnetics Group moved onto the AIM market in March 2002.

In February 2004, Quadnetics acquired Look CCTV Limited, the UK's leading supplier of CCTV systems on buses, and Coex Limited, a leading global supplier of CCTV products for the oil/gas and marine industries.

In May 2005 the Group acquired the trade and assets of Alphapoint LLC, a specialist provider of digital surveillance technology, based in California, now trading as Synectic Systems, Inc. The business has become the Group's North American sales and service base.

In November 2005, the Group acquired Protec plc under the terms of a recommended all share offer for the Company. Protec plc was a UK based independent AIM listed, security, technology integration and surveillance business.

In June 2006 the Group announced the restructuring of its activities into two principal businesses, Quadrant Security Group and Synectic Systems Group.


Fast Facts:
• Quadnetics Group plc is a leader in the design, integration and control of advanced - CCTV and networked video systems and supplies a wide range of market sectors.
• Founded in 1983.
• Full listing on London Stock Exchange in 1987.
• Listing transferred to AIM in 2001.
• Look CCTV and Coex Limited acquired in February 2004.
• Synectic Systems, Inc established in US in May 2006.
• Protec Group acquired in November 2005 for £10m.
• The Group currently has around 400 employees.
• In June 2006 Group businesses restructured into 2 divisions - Quadrant Security Group and Synectic Systems Group. As follows:-

Quadrant Security Group
- Integrated Systems
- Mobile Surveillance
- Support Services

Synectic Systems Group
- Security Networks
- Surveillance Technology
- Industrial Systems

[the analyst] 21/9/2006 17:38

New Broker Note from Brewin Dolphin



19 September 2006 - Preliminary Results Highlights for the year ended 31 May 2006
- Successful acquisition of Protec plc, creating leading independent CCTV security services provider in the UK
- Consolidation of enlarged Quadnetics Group into two focused electronic security business unit with significant scale
- Investment in launch of new US subsidiary for local support of Synectics security systems technology
- Strengthened senior management team and group infrastructure to support growth
- Turnover £49.6 million (2004/5: £26.8 million), with 7 months contribution from Protec
- Profit before tax, exceptional costs and goodwill amortisation up 36% to £3.6 million; underlying earnings per share up 21% to 24.2p (again benefiting from a reduced tax rate)
- Net cash £8.9 million
- Order books up 30% at year end
- Proposed final dividend 3.5p per share, making 5.0p for the full year (up 25%)
- Overall, a very satisfactory year, which has positioned the Group for further growth in a large and attractive market



Updated Website 18th September 2006:


Investor Relations


Broker notes

[mangal] 21/9/2006 17:19

TA, the title is fine. re loonies - well, they do make life interesting as long as they don't overwhelm the rationalists !

[josh devil] 21/9/2006 17:15

The point about Ind and Qdg is that they are different - in the same sector primarily CCTV Security - but different.

Ind is essentially product and software, Qdg has some product and software but c 50% revenues come from services - installation, maintenance and contract management. Ind can grow organically by 100% pa and profit will grow faster Qdg will need to make acquisitions to dramatically grow turnover and profit will edge up more slowly but will be based on sustainable revenues.

I think that the question over qdg in the longer term is do they hive off the Synectics business as there maybe a conflict further down the line. For now as a shareholder it does not matter but in a couple of years the strategy will be blurred.

The question over Ind is do they have the management to deliver the growth profitably?

Time will tell for both but for now I am happy to dee the prices of both climb!

[the analyst] 21/9/2006 17:14

or "Quadnetics: advanced e-surveillance systems"

guess it's not too important!

[the analyst] 21/9/2006 17:11

How about a mundane title for the new thread like "Quadnetics: advanced e-surveillance technology"

Does what it says on the tin - don't really want a ramping title, it tends to attract the loons...

[mangal] 21/9/2006 16:58

Yes, a bang it is & more exposure too: It's in the list of top %risers today & so, will hopefully get noticed a bit more.

[the analyst] 21/9/2006 16:13

Maybe some of those that are interested in the sector (IND for example) have noticed this company?

IND and QDG have similar market caps, but by my calculations it may take IND more than 3 years of 100% growth just to get anywhere near QDG in terms of profit. I'm not saying that IND can't do that, but everything has to go right for them to get near to QDG. One year ago things were different, but currently the value seems to be here.

Cheers Mangal, Will put a new thread up tonight or tomorrow when markets are closed.

[charterhouse3] 21/9/2006 15:28

If this is to be the end of this thread then we are going out with a bang !!!

260 bid and 280 offered as I write.

Marvellous stuff.

CH3

[mangal] 21/9/2006 14:55

ok! agree, the hdr IS a bit dated now; so yes, wouldn't mind if someone started another thread.

[charterhouse3] 21/9/2006 13:03

Analyst

Excellent idea regarding a new thread.
The current header is a bit 'sad'.

Look forward to contributing to it in due course.

CH3

[the analyst] 21/9/2006 12:07

May be worth getting a new discussion for 2007 and beyond - the current header is almost four years old and doesn't say anything about the current prospects of the company or the present situation on profit/deals/brokers etc.

Might get one together later...