Spectra Systems Share Discussion Threads

[woodcutter] 30/4/2014 10:19

had a quick look at these and crunched some numbers. Still going through the detail of the report but based on financials with a few assumptions this is how it looks to me.

Assuming similar growth in revenue next year;
revenue $14233
GM @ 48% $6831

growth in sales was 23% and growth in overheads was 18.4% so assuming the same ratio

overheads $7420
EBITDA ($589)
Assume net I D&A ($300)
loss roughly ($900K)

BS looks decent with $13m in cash but down from $16m so cash erosion worth thinking about. Inventories at $3m looks large too probably a carry over from the major contract cancellation. loss isn't reflected in the cashflow from operations which looks reasonably solid in comparison.

My concerns would be the value of revenue required to break even (whilst the cash is being burned) which i guess is around $18m. I can see why the drop today but the potential looks interesting, with possible game change in bank note cleansing.

I'll watch with interest and do a little more background reading for now.

Woody

[el1te] 30/4/2014 07:51

No-one expected the figures to be great, that expectation is for next year. The restricted and unrestricted cash balance and other tangible asset cover the market cap, and there looks to be promising upside from:
- the new factory which should boost margins
- Inksure and the related market opportunities
- Aeris
- The latent potential of the covert security features from the failed CB deal

Hard to take the share price drop seriously when it's on minimal volumes and when you look at the trade prices.

All in all, results as expected with future potential.

[stewy_18] 30/4/2014 07:44

Actual figures were not great that is why it is down. Speculative, but I think it will do well over a 3 year time frame. Patience needed. In the meantime it could go anywhere.

[fozzie] 30/4/2014 07:40

Down 15% on what i thought was a very good statement. Back to bed for me.

[el1te] 30/4/2014 06:48

The brand authentication side sounds pretty interesting as well as the Central Bank ops. Positive outlook for the rest of the year and solid balance sheet.

[battlebus2] 30/4/2014 06:45

Results as expected with the improvement to follow into the remainder of 2014.

Prospects look great imv.


The Company's prospects have dramatically grown through the combination of the Inksure acquisition and the Company's organic banknote and product authentication development efforts, as well as our demonstration of a breakthrough technology for cleaning banknotes. Inksure customers include tax stamp authorities and brand owners who we feel will eventually be ready for upgraded, higher performance products built around our core technologies. Particularly important prospects for growth are:

1) The mobile phone based product authentication which will draw on both our expertise in optical materials and physics, as well as the database competence of the Secure Transactions Group.

2) The ongoing development effort initiated with Inksure by a large consumer brand supplier interested in a lock and key solution for their machines and consumables.

The combination of our new manufacturing facility shipping product for use by 18 central banks and the expected material qualification and contract renewal with a G8 central bank in 2014 will have a significant impact on our machine-readable materials margins. With the continued marketing efforts of our licensing partner, we will be able to increase earnings from this facility.

Our demonstration of a technology which can remove soiling substances (primarily human oils) without damaging the costly security features or compromising print has created a new paradigm in the banknote industry. Based on the continued growth in banknote production to the level of nearly 150 billion banknotes per year at a cost approaching $10 billion annually, we believe that we will have strong prospects for revenue growth in a segment of the industry where we expect to have controlling intellectual property.

The Board therefore believes that the Company continues to have excellent prospects and will perform strongly in 2014.

[diku] 30/4/2014 06:40

What say the results?...any views...

[stewy_18] 29/4/2014 06:32

I wait in hope rather than expectation. I think the contracts should start coming in this year.

[battlebus2] 29/4/2014 06:10

Spectra Systems will be releasing its year end results for 2013 on Wednesday, April 30, 2014.

[el1te] 28/4/2014 17:11

Great spot battlebus. Good news

[battlebus2] 28/4/2014 16:54

More good news....

PROVIDENCE, R.I., April 28, 2014 /PRNewswire/ -- Spectra Systems Corporation (LSE: SPSY.L) is pleased to announce that it has signed a lottery Internal Control System (ICS) services contract to benefit the Michigan Lottery, which is the first to include a dedicated Internal Control System with new service and software development capabilities for Internet and mobile lottery. The contract has an initial term of four years with provisions for extensions.

The Michigan Lottery's iLottery services will allow Michigan residents to play their favorite existing lottery games through new distribution channels-over the Internet and on mobile devices. The ICS platform will provide the lottery an independent ability to monitor and validate the Internet and mobile sales and ensure player and system integrity and security.

"Spectra Systems is excited to help bring iLottery services to the residents of Michigan," expressed Nabil Lawandy, chief executive officer at Spectra Systems. He continued, "Over the coming years, we hope to bring security and integrity of ICS services to the benefit of lotteries as they open new channels of digital distribution."

[kinkell] 23/4/2014 16:54

Elite,

Many thanks.

[el1te] 23/4/2014 16:22

I'd expect the FY results to be released within the next couple of weeks

[kinkell] 23/4/2014 16:12

Anybody know when next announcement expected?

[battlebus2] 23/4/2014 14:16

Bit of a quick reversal there and now positive. Late trade to be reported possibly.

[gary1966] 15/4/2014 15:39

Well hopefully a 20% rise will get a few people to take a look at the co and see what a bargain it still is at these levels.

[sailing john] 15/4/2014 07:59

GHF/BB2
I might have known that you would be invested here. I bought a few in March but then took my eye off the ball and didn't add to my initial holding.
GL - SJ

[hastings] 15/4/2014 07:58

What I find really intriguing here, is that while there is obvious immense blue sky potential,the shares are not up in cloud cuckoo land like many others.

As GHF said, valuation and that is, after the rise today, is little more than cash on the balance sheet. Certainly under the radar and no doubt any positive news from the company would stir up some real interest.

[harrogate] 15/4/2014 07:30

Not sure they have any to shift any more after last week.

[diku] 15/4/2014 07:15

You mean the herd is yet to come...

[horndean eagle] 15/4/2014 07:10

Its all a bit illusory. Market makers are playing games and trying to shift stock. No buying interest yet but hopefully story gets picked up by a wider audience or tipsheet and that will change.

[battlebus2] 15/4/2014 07:04

A great start to the day here :))

[glasshalfull] 14/4/2014 22:38

Hard to ignore a company trading at such a discount to NAV of 34p...when the cash balance itself almost equates to the current market cap.

We know the high margin phosphor sales have recovered via recent RNS announcement, and while certain aspects of company contracts and delivery will continue to be lumpy, the blue sky potential of their Aeris banknote cleaning system is effectively valued at nil.

It should also be noted that the company spends $2 million per annum on R&D which is fully expensed which again indicates the hidden value here.

I believe much of the overhang was taken out last week and I'd imagine a number of investors that have welcomed the opportunity to invest in a cash rich company at distressed levels.


Regards,
GHF

[glluckett2] 14/4/2014 22:22

Did anyone spot all the late-reported trades today ??