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OTAQ has multiple revenue streams, and strong revenue growth looks likely on a number of product fronts.
In particular, there are two products that in aggregate could potentially deliver revenue growth of say c. £2M. in OTAQ's coming financial year, which would be a step change in the company's turnover:
1. OTAQ sonars to Minnowtech.
Hedgehog100 Posts: 1,695 Price: 27.50 Strong Buy Minnowtech Marching On! 9 Feb '22
" ... So 127 OTAQ sonars to Minnowtech will deliver over £200K. of revenue to OTAQ in its H2 to 31.3.22.
If a high three figure number of sonars are expected to be supplied in 2022, say 800, then that would mean 700 in April-December 2022.
Which on the basis of over £200K. for 127, would suggest over £1.1M. for a further 700."
2. OTAQ Sealfence systems in Chile.
20th Jul 2021 7:00 am RNS Final Results
" ... Final Results for the year ended 31 March 2021.
... In the meantime, our ADDs are being deployed in increasing numbers in Chile, notwithstanding the ongoing Covid biosecurity restrictions that are in place. The number of operational ADDs in that market has increased from 142 as at April 2020 to 264 at the end of June 2021 and several large-scale trials are currently underway utilising our technology. The Chilean aquaculture market is substantial and estimated to be over three times larger than the Scottish market where we are currently most active. We look forward to further growth of our ADDs in Chile and other geographic markets where similar trials are currently underway and the regulatory framework is more settled. ... "
https://www.lse.co.uk/rns/OTAQ/final-results-per68letf081xak.html
15th Dec 2021 7:00 am RNS Interim Results
" ... Interim Results for six months to 30 September 2021
...288 Sealfence units rented by Chilean customers in the period ...
Post-Period Highlights
· Successful conclusion of a six-month ADD trial with a major Chilean salmon farmer...
The successful conclusion in October 2021 of a six-month trial with a major Chilean salmon farmer has resulted in discussions about a further rollout to the customer's sites. ...
As a result of the Group diversifying and developing its interests outside of the Scottish salmon market, Chile has seen growth in the first half of the year and the recent successful conclusion of a six-month trial with a major Chilean salmon farmer is expected to lead to increased growth in Chile in the second half of the year and beyond. ..."
https://www.lse.co.uk/rns/OTAQ/interim-results-pjcbcd45x2fm49r.html
So potentially an increase in OTAQ's annual turnover of c. 50% or more, from about £4M. to £6M.+.
And potentially also a very strong move into pre-tax profitability.
Hedgehog, considering all the positive news you are posting, what do you think is driving the share price weakness?
Terry,
I think the main reason is the overall stock market weakness this year, especially for many shares, with many tech. shares being particularly badly hit.
Combined with the company being in a quiet period for RNSed news: there's been no real news announced from the company since mid December.
And this share is very illiquid, so if even just one or two retail shareholders decide to sell some, that can have quite a big impact.
But illiquidity is a double-edged sword of course: this share can move up very quickly on minimal buying.
The irony is that oil services and related companies are some of the few to have been doing well recently, and a lot of OTAQ's business is in that field.
Surging oil & energy prices are creating boom conditions for producers, with their s.p.s soaring as a results.
And that also increases demand for the products and services of oil services companies.
NYSE-listed Schlumberger (SLB), the world's largest oil services company, has already seen its s.p. quadruple over the last couple of years.
But the improved conditions don't yet seem to have such an impact on smaller oil services shares, so there could be an opportunity there.
"I think the main reason is the overall stock market weakness this year, especially for many shares, with many tech. shares being particularly badly hit."
That should say: ... especially for many penny shares ...