Zytronic Share Discussion Threads

[igoe104] 02/8/2016 21:19

NEW CONTRACT.


Zytronic has found success in yet another market for its digital signage touch sensors, with the company’s technology having recently been installed at self-service car washes across Europe.

Nilfisk Car Wash Business Unit chose the durable Projected Capacitive Technology touch sensors to provide the user interface and interactive digital signage features for its Wap WaschBär self-service car wash systems.

Nilfisk have over 1000 systems have been deployed in locations throughout Europe, with the company selecting the 12in ZyBrid touch sensors to power its experience; largely due to the fact that they promise to perform reliably, even when wet.

According to Martin Seitz, product manager for car wash products at Nilfisk: “Nilfisk pioneered the introduction of touch screens into self-service car wash installations. Currently, 80% of German customers and 50% of Russian and Polish customers specify the touch screen version of the Wap WaschBär over the lower cost version with control buttons.

“The screens make our car wash much easier and more intuitive to use, with short video clips on correct operation supplementing written instructions. Operators are also able to increase sales by promoting special offers. For example, it is common to offer a longer wash time during the night at 24 hour stations. Finally, operators can capture additional revenue by selling space on the screens for advertising.”

Self-service car washes represent a very demanding environment, as they are outdoor, in operation 24×7, used year round in all weather conditions and are almost constantly wet. Sometimes, for example, the user may direct the wash hose at the control unit.

The challenge for Nilfisk was identifying a touch technology that was completely sealable, worked reliably when wet and delivers a great user experience in all conditions. It found that many touchscreens performed erratically or failed altogether when water were present on the screen, causing great frustration to customers, particularly if the problems led to car wash selection errors.

Martin Seitz continues: “Zytronic touch sensors are completely unaffected by water even if it is on the screen itself. The sensors are exceptionally reliable and give the outstanding user experience that our customers expect from a market leader.”

In addition to providing operating instructions, the ZyBrid touch screens offer a flexible interactive digital signage platform. Nilfisk provide a web interface, enabling images and videos to be uploaded and changed from a remote, networked location. In addition to their own special offers, operators typically use the screens to promote car accessories and other products available within the forecourt store and even allows customers to make purchases direct from the terminal.

[kalkanite] 22/7/2016 15:41

3.45p dividends received today. Luvly jubbly

[mattleplonk] 08/7/2016 11:30

Glaw2, where did you get your numbers from? I looked in 2015 report and EMEA was 42% (excluding UK) but I couldn't find mention of a specific number for Hungary?

[fizzypop] 07/7/2016 07:13

Ex div today Interim=3.45p

[shanklin] 01/7/2016 11:42

Thank you Glaws2

[glaws2] 01/7/2016 11:33

25% to EMEA (exluding UK) & 16% to Hungary

[shanklin] 01/7/2016 11:30

What proportion of sales are to Europe please? I cannot see it in the last two results presentations or the 2015 results.

[igoe104] 28/6/2016 15:57

Write up from motley fool.

Stunning track record

Also offering excellent long term growth potential is Zytronic(LSE: ZYT). Its track record is stunning, with the touchscreen glass manufacturer recording an annualised growth rate in earnings of almost 11% during the last five years. And with demand for touchscreen products likely to rise over the long run, as their use becomes more widespread across a number of different industries and applications, Zytronic's outlook is highly positive.

In fact, over the next two financial years Zytronic is expected to continue to record positive earnings growth numbers. And with its shares yielding around 4.2%, they seem to offer excellent income prospects. That's especially the case since Zytronic currently pays out just 50% of profit as a dividend, which indicates that shareholder payouts could move sharply higher over the medium to long term

[4noddy] 24/6/2016 12:52

Some ZYT news:
Zytronic, a leader in advanced, rugged Projected Capacitive Technology (PCT and MPCT) touch sensors has announced the addition of force sensing to its touch sensors allowing ATMs, kiosks, game terminals and interactive video walls to differentiate between a soft and hard touch.

According to Ian Crosby, sales and marketing director of Zytronic, “Force or pressure sensing is a whole new way of interacting with a touch screen, and Zytronic is leading the industry in making it available to the retail, commercial and industrial markets. It literally and figuratively adds a new dimension to the touch experience, giving application developers a fantastic opportunity to innovate. It is particularly powerful when used in combination with Zytronic multi touch technology, exceeding what is possible on all but the most advanced tablets and smartphones today.”

Force or pressure sensing is becoming available on smartphones and tablets. Zytronic is a pioneer in bringing it to financial, retail, gaming, industrial and other commercial touch screen applications. Zytronic’s approach is based on a measurement of the surface area of an applied touch, which changes the measured capacitive signal levels at the relative touch location on the sensor. This eliminates the need for a piezo-electric or other layers on the glass to measure applied force or pressure.

He continued: “In a way finder or web browsing application, a soft touch can open a preview window – then pressing harder fully opens the window. On a kiosk, a soft touch can bring up a menu of options and increasing the applied force makes a selection. There is a great opportunity to make kiosks and ATMs more accessible to partially sighted users. An initial soft touch can trigger an audio confirmation of the selection, then increasing the force activates the choice.”

Zytronic has created two demo apps, which can be viewed on YouTube. A video showing how force sensing technology can help partially sighted users interact with a keyboard or PIN pad on a touchscreen enabled ATM or kiosk is here: A further video showing how force sensing can transform a wayfinder is here:

“Force sensing can open new applications too,” Ian Crosby concluded. “Developers can create drawing and writing applications that respond to applied force without an active stylus. There is huge potential for innovative music applications, as well as for gaming and other smart user interfaces.”

The Zytronic force sensing feature is offered in a custom firmware release for its ZXY150, ZXY200 and ZXY300 controllers. The feature doesn’t entail any hardware modification, so existing customers could retrofit force sensing by refreshing the firmware and adapting their application to respond appropriately. Zytronic is providing customers using the feature with a new version of the ZyConfig software that supports the feature, together with an output protocol note on how an app developer can access the force sensing data from our controller and use it in their app development.

[raymund] 23/6/2016 10:23

Back in again yesterday and looks a good move!

[igoe104] 08/6/2016 13:16

Its worth visiting the Euro Games Technology web-site, because they are a growing partner of ZYT.

A move in the USA, with the Roulette machines would massive returns for Zyt and partners.

I like the look at this.

EGT makes a splash in tribal gaming community in the U.S.

During the first day of Indian Gaming Show became clear the visitors’ favorites in EGT’s gaming portfolio: the Luxury series touch screen table with an automated roulette wheel; the mystery and progressive jackpot systems


I`m keeping a close eye on ECT`S news flow because it could have a positive impact on ZYT.





Euro Games Technology (EGT), one of the fastest growing companies in the global gaming industry, used Zytronic Projected Capacitive Technology (PCT™) to create a completely new multiplayer luxury roulette game on an 84” table with up to eight independent touch areas. The EGT Luxury Touch Table won an award at G2E last year and has already been installed in 50 casinos, including WINBET in Bulgaria, Casino Advanced Technology, France and Casino VINMOE in Ireland.

[igoe104] 08/6/2016 12:02

Good write-up

electronics weekly

[rcturner2] 07/6/2016 10:20

A significant amount of share price movements are irrational. More noise than signal. This has been known for decades. It is to the advantage of cautious long term investors.

[igoe104] 07/6/2016 09:11

Strange things, market are ?

compare zyt to igp, who have just announced results.

Igp have announced a loss of 1 million, for the year.

they are capped 5 million more than ZYT.

they have 4 million less in the bank than ZYT

and don`t pay a divi, where ZYT pay a cracking one.

so how come their share price has gone up on results, while ZYT has gone down ?

[capercaillie] 06/6/2016 14:26

Added to my modest holding today. I like that cash.

[effortless cool] 26/5/2016 16:13

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Update October 2016
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I have updated to reflect the trading statement issued on 17 October. This intimated that earnings would be "at least in line with market expectations" before a £900k hit from a misguided FX hedge.

Consensus earnings are 25.9p, so I have flexed my assumptions to give 26.1p earnings for 2016, 20.5p after the FX adjustment.

These changes increase my valuation to 423.9p, 14% above the current 372.5p, and still a HOLD for me.

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Update December 2016
=====================

Everything was good about ZYT's final results except the top line, which showed a 1% fall from the previous year. However, in truth, the revenue failure mainly occurred in H1, with the seasonally stronger H2 showing a decent recovery.

My revised forecasts are set out below.
- Revenue: 2017 £22.2m, 2018 £23.7m
- PTP: 2017 £5.1m, 2018 £5.4m
- Net cash: 2017 £14.2m, 2018 £16.9m
- EPS: 2017 31.7p, 2018 32.6p
- DPS: 2017 15.8p, 2017 17.4p

Based on a target PE ratio of 12, and adjusting for tax, debt, options and excess cash, I arrive at a target valuation of 445.9p. At 13% above the current price of 395p, this represents a firm HOLD for me.

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Update May 2017
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ZYT's 2017 H1 revenues showed a good top line recovery to £11.3m, up 14% on the corresponding disappointing figure in 2016 H1. This is the highest half year revenue that the business has achieved, narrowly beating the 2015 H2 figure.

My revised forecasts are set out below, with broker consensus figures, where available, in brackets.
- Revenue: 2017 £23.4m (£21.9m), 2018 £24.7m (£22.6m)
- Net income: 2017 £5.1m (£4.0m), 2018 £5.3m
- Net cash: 2017 £15.1m, 2018 £20.1m
- EPS: 2017 31.8p (28.6p), 2018 32.2p (29.9p)
- DPS: 2017 15.86p (16.6p), 2017 17.44p (19.0p)

Based on a target PE ratio of 14, and adjusting for tax, debt, options and excess cash, I arrive at a target valuation of 552.6p. At 5% above the current price of 527.5p, this represents a HOLD for me.

Note that I have increased my target PE ratio from 12 to 14, to reflect the shares apparent return to growth. With H2 revenue over £1m ahead of H1 in each of the last three years, the broker consensus figure seems significantly undercooked, and I strongly anticipate upgrades/outperformance.

Cash holdings are reaching stupid levels, and management really need to use it or return it.

I have one outstanding question with the company regarding FX, and may revise these forecasts once it has been answered.

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Update December 2017
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ZYT's 2017 full year results were a touch disappointing. Whilst H2 revenues reached record levels, they did not show the normal seasonal peak versus H1. Further, the outlook statement seemed to imply fairly flat revenues for 2018. Profits were fractionally ahead of expectations, but there was an encouraging 39% increase in the final dividend, which hopefully represents a statement of intent for the future.

My revised forecasts are set out below, with broker consensus figures, where available, in brackets.
- Revenue: 2018 £23.3m (£22.6m), 2019 £24.6m (£23.6m)
- Net income: 2018 £4.1m, 2019 £4.3m
- Net cash: 2018 £14.8m, 2019 £15.0m
- Normalised EPS: 2018 25.5p (29.9p), 2019 27.0p (31.9p)
- DPS: 2018 22.8p (22.8p), 2019 27.4p (27.4p)

The difference in revenues suggests potential for broker upgrades. The adverse difference in normalised EPS probably relates to admin expenses, where FX effects have had a rather impenetrable impact on recent history, making this particularly challenging to forecast.

I have reduced my target price to 491p. Therefore, at the current level of 480p, this represents a HOLD for me.

Perversely, perhaps, I have actually been buying. I feel that the recent fall in the ZYT share price makes this an attractive place to park my cash, and the potential for further large increases in the dividend (above the 20% in my projections) could drive the price higher in the medium term.

[igoe104] 26/5/2016 16:11

Corrected now.

The touch screen business has huge potential, globally.

[effortless cool] 26/5/2016 16:09

That link takes me to an old story on Lakehouse.

[igoe104] 26/5/2016 16:05

Projected Capacitive Technology touch sensors find the way at resort.

[effortless cool] 26/5/2016 14:44

rivaldo,

You make fair comments, I think. I take account of normal seasonal fluctuations in my projections and, at 25.2p EPS, come out just short of the analyst estimate of 25.9p. There are no obvious catalysts for price movements before the next update unless, of course, they decide to do something with their piles of cash ...

[gdjs100] 26/5/2016 13:12

They are always strongly seasonally biased towards H2 - this has been the case in 7 out of the last 8 years. There shouldn't be any reason to not expect that this year.

[rivaldo] 26/5/2016 12:33

My problem with ZYT's current valuation is nervousness about them meeting expectations this year.

ZYT made 9.6p EPS in this H1, so that leaves them having to make 16.3p EPS in H2 just to meet the 25.9p EPS forecast.

They made 16p EPS in last year's H2, so it's certainly possible.

But this year's H1 was characterised by a big decline in the traditional business sales of glass displays and filter products. So ZYT had to run fast just to stand still. Since touch product sales only increased 5% over last year this meant group profits improved overall given the higher touch margins, but not enough to make a big difference.

The outlook suggest a continuation in H2, with traditional business again slipping and being outweighed by touch.

This year's forecast/expectations have perhaps been overinflated by last year's exceptional H2.

It's a long time until the next trading update in October, so I'll probably stay out until confirmation at that point that H2 has - or hasn't - been able to achieve a similar improvement in H2 to last year.

[igoe104] 23/5/2016 19:16

Good write-up in the IC AND A BUY RECOMMENDATION.

[effortless cool] 21/5/2016 23:38

Time to move on from Zytronic - 2009?

[effortless cool] 21/5/2016 23:37

In its own words, "Zytronic is a leading global manufacturer of touch-based products for public access and industrial applications".

In fact, touch-based products account for 84% of its revenue (as at 2016 interims) and deliver a materially higher margin than non-touch screens. The main driver of growth at present is large format curved screens for the gaming industry.

Zytronic has a consistent record of profitability but has been unable to establish a sustainable revenue growth trend. After achieving record revenues of £11.3m in 2015 H2, there is no doubt that the fall to £9.9m in 2016 H1 was a real disappointment.

Notwithstanding its revenue challenges, however, Zytronic has been consistently profitable and cash-generative. As of 2016 H1, it carried net cash of £9.5m and a dividend yield of 3.1%.

This is, of course, far more cash than a business this size needs, and Zytronic management need to grasp the strategic nettle and decide what to do with it.

The outlook statement in the interims was cautiously optimistic, and I am forecasting a resumption of gentle growth, consistent with the long-run trend. My forecasts are as follows:
- Revenue: 2016 £21.1m, 2017 £21.9m
- PTP: 2016 £4.3m, 2017 £4.9m
- Net cash: 2016 £10.9m, 2017 £13.1m
- EPS: 2016 25.2p, 2017 28.4p
- DPS: 2016 13.2p, 2017 14.5p

Based on a target PE ratio of 12, and adjusting for tax, debt, options and excess cash, I arrive at a target valuation of 398.6p. At 3% above the current price of 388p, this represents a firm HOLD for me.

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October 2018 update
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Following the recent profit warning, my valuation for ZYT fell to 360p. The subsequent Questor tip took the share back up above 400p, and I took the opportunity to sell out.

Final outcome: realised gain £29.7k, dividends £8.8k, IRR 16.6%.