The 'warning/update' is because of a contract that was due to fall in this year's figures being expanded in size and scope - such that it will only be realised next year - so hardly a 'warning' regarding the value of what the company is doing and its prospects......i.e. no rational reason for a fall in the sp based on this news. RNS = 13 November 2013 Ubisense Group plc Trading Update Cambridge, UK - Ubisense Group plc ("Ubisense" or the "Company") (LSE:UBI), a market leader in real time location intelligence solutions, provides the following update on trading performance. The Group has displayed strong momentum in the second half with its converged technology offering leading to significant contract wins during the period. In order to meet customer demand for the converged solutions, the Group has accelerated investment in the product portfolio, including its next generation Smart Factory System and MyWorld products and applications. In addition, a large OEM deal initially expected to fall within the period delivering revenue of approximately £1.9m has been delayed due to the size and scope of the contract expanding. The deal is expected to deliver significant value next year. As a result, the Group now expects to post revenues at the lower end of the range of expectations and EBITDA in line with 2012 levels. The benefit of the investment and the increasing customer demand is evidenced today with the announcement that a large European automotive manufacturer has chosen to extend their initial Smart Factory System deployment to a third facility after going into production with the system earlier in July. The order, valued at approximately $1 million, is part of a global framework agreement with the manufacturer and will extend the system from their assembly line to the finishing facility.
13 Nov '13
Before today's profit warning the consensus forecasts were for just 0.19p EPS for this year and 0.33p EPS for next year, i.e PBT of just £90k this year and £140k next year. This against a £44m m/cap. After today's profit warning/update I assume that these forecasts will be further reduced. UBI looks a top quality company to me. But it's one of those situations where investors have to decide whether they accept what is fundamentally a highly overvalued share price at present on the basis that UBI will - eventually - deliver fast growth at some point. The downside risk looks much greater than the potential upside for me at present, especially as although there are loan facilities in place there's still the risk of further dilution for working capital. A 100p share price (say) would give a much more realistic valuation of around £22m. However....it seems UBI has strong institutional support, and there are a number of companies on the market which are valued at hundreds of millions of pounds which are still loss-making. So it's a question of whether you believe in the company so much that you can overlook the fundamentals and concentrate on the potential instead. I'm not a holder at these levels and almost certainly won't be unless the share price falls some way from here.
4 Nov '13
On board today...
Leigh Himsworth ups Ubisense stake City Financial’s UK equity manager Leigh Himsworth has topped up his position in Ubisense. Himsworth, who runs the City Financial UK Select Opportunities fund, bought a further 48,000 shares in the location intelligence technology provider at 212 pence. This brings his fund’s total position up to 525,000 shares, equating to an approximate value of £1.1 million. Himsworth expects the company to experience further growth because of the role it plays in improving workflow at companies. He was also keen to highlight the string of contracts that Ubisense has won more recently, which include BMW, Airbus, Caterpillar and Deutsche Telekom. ‘As an investor it is exciting having access to a technological leader with a host of fantastic customer references that is genuinely global in its offer. Who says that the UK doesn’t produce anything! This is yet to be fully appreciated by the market,’ he added.
Datafeed and UK data supplied by NETbuilder and Interactive Data.
While London South East do their best to maintain the high quality of the information displayed on this site,
we cannot be held responsible for any loss due to incorrect information found here. All information is provided free of charge, 'as-is', and you use it at your own risk!
The contents of all 'Chat' messages should not be construed as advice and represent the opinions of the authors, not those of London South East Limited, or its affiliates.
London South East does not authorise or approve this content, and reserves the right to remove items at its discretion.