Member Info for Hedgehog100

Dab,

Unfortunately I can't make NWT's AGM tomorrow morning, though I would certainly hope to attend one in the future, especially if one is held in the afternoon, which would make it easier for day trippers to London.

And there should be a NWT AGM later this year, as the next final results should be announced fat earlier than the recent one - perhaps as early as September, as in previous years.

I hope you enjoy it, and find it useful. And I look forward to receiving your feedback, please!

I'd be interested if NWT have any plans to publish any forecasts.

I also note that NWT's new investor presentation still is on their website - it's still just the November 2021 presentation - though presumably they will replace this soon.
https://newmarksecurity.com/investor-relations/reports-and-presentations/

Thanks also for the offer of a potential conference call with NWT: I would be interested in this too if you have one in the future, but I'm happy to leave things in your capable hands for the moment!

From NWT's Investor Meet Company presentation slides, 8th. February 2023:-

Slide 6:-

"Organisations are facing a critical data vulnerability in the intersection between physical and digital worlds.

IDENTITY DATA

To comply with emerging data protection legislation,
organisations need a better way to control and manage
sensitive identity data as it travels between devices,
buildings and corporate systems.

IOT DEVICES ENTERPRISE SYSTEMS

Is your identity in safe hands?"

https://www.investormeetcompany.com/

From Slide 15:-

"GTM STRATEGY

1. SERVITIZATION – AS-A-SERVICE TRANSITION
• Enhanced partnerships: Major account joint bidding
• Direct sales: Retrofit & upgrade service
• Supply chain: Localised US supply chain

2. ACCOUNT-BASED SELLING
• Whitespace opportunity: Blue-chip customers, transition to subscriptions

3. SECURE KEY PARTNERSHIPS
• Target top 10 US HCM partnerships: Create partnerships/accreditations in US & globally
• Create strategic OEM alliances: Explore alliances with adjacent WFM + AC device manufacturers to integrate GT Connect
• Target other HCM/VAR partnerships: Expand European/UK network and opportunities"

https://www.investormeetcompany.com/

Slide 16:-

"Our mission. To rapidly scale our recurring revenue business model – Hardware-enabled enterprise SaaS.

Leveraging deep expertise and IP in security technology and services, our pivot to recurring revenues through hardware-enabled enterprise SaaS provides a strong foundation for scalable growth.

• Rapidly growing enterprise recurring revenue model

• Class-leading products and services

• Blue-chip client base

• Long-term end-client relationships

• Accelerated growth through rapid takeup of subscription model

• Incremental margin improvement

• Central security control creates high long-term value

• Strong growth record"

https://www.investormeetcompany.com/

So this potential £200M. market cap. for NWT could be a 49-bagger from the current s.p. of 43.5p.

That size of multibagger seems particularly appropriate in return for NWT's 'striking gold' in America, as it conjures up images of the forty-niners of the California Gold Rush:-

https://en.wikipedia.org/wiki/California_Gold_Rush#Forty-niners

From NWT's Investor Meet Company presentation video, 8th. February 2023:-

23:56: " ... Our vision is to build a business that generates 2 - 3 times its current revenues in the next 3 - 5 years. ... now is a very exciting time for us. With considerable recent efforts and investments, we are very well-positioned to achieve this vision. We're confident because we have an enterprise recurring revenue model that's rapidly growing, we have class-leading products and services, and we have an enviable blue-chip client base with top tier partners ready to transition onto subscription. And we enjoy long term client relationships with seven to ten year life cycles. As the take-up of our subscription model accelerates, this brings much improved margins through blended subscriptions, and by positioning within the trusted walls of enterprise security, we are creating long term value that has plenty of scope to be leveraged in the future to build a strong growth record. ... "

https://www.investormeetcompany.com/

I would add the following big bull points in particular to the above:-

• The strong USA exposure, with its attendant far bigger growth potential.

• The multiple regulatory and technological growth drivers.

Considering also NWT's strong tech & USA growth momentum over the last several years, then their 3 - 5 year vision sounds more than plausible.
- It's a vision that's clearly based on solid facts & achievements, rather than the 'pie in the sky' of some other penny shares.

So, from its current revenue level of c. £20M. p.a., NWT has a realistically achievable prospect of increasing this to c. £40M. - £60M. p.a. in the next 3 - 5 years.
Which, if combined with a continued increase in overall margins as expected, would translate into an even greater proportionate increase in profitability.

For example, an overall pre-tax profit margin of say c. a sixth, on annual revenue of c. £60M., would equate to c. £10M. p.a. pre-tax profit: i.e. more than double NWT's current market cap.

And if NWT is rated at c. 20 times pre-tax profit, this would equate to a market cap. of c. £200M.

And based on NWT's current 9,374,647 shares in issue, this would equate to a share price of 2133p.

I.e. a 49-bagger from the current s.p. of 43.5p.

The tech side of NWT's business has seen its annual revenues double in the last five years, fuelled by the hugely successful expansion into the USA.
But this success has been 'masked' by the decline of the non-tech side, with the decline of Safetell's traditional banking business.

The aggregate change though has been transformative, with NWT's tech side now making up about 80% of Group revenues, and rising, compared to barely a third in 2017.
Which means that NWT as a whole is now deserving of a far more generous tech-style rating, especially with its rapidly growing proportion of recurring revenues.

And with Safetell's revenues having fallen from c. £14M. in 2017, to an annualised level of about £4M. now, this rate of decline clearly cannot continue.
Indeed, with Safetell's planned expansion in the UK autodoor servicing market (estimated at twice the size of Safetell's traditional markets), there is scope for both a strong recovery in Safetell's revenues, and a strong increase in its proportion of recurring revenues.

So Safetell's negative effect on NWT's overall growth should reverse, with it adding to the growth instead.
And as NWT's tech side should continue to go from from strength to strength, the overall Group performance should start to strongly reflect this tech success story.

NWT's year ended 30.4.17:-
Electronic division (Grosvenor Technology): 44% (£7.63M.) of total NWT revenue (up from 35%).
Asset protection division (Safetell): 56% (£14.18M.) of total NWT revenue (down from 65%).

NWT's year ended 30.4.22:-
Hardware-software (Grosvenor Technology): 76% (£14.6M.) of total NWT revenue.
Physical security (Safetell): 24% (£4.59M.) of total NWT revenue.

NWT's half year ended 31.10.22:-
Hardware-software (Grosvenor Technology): 79.2% (£8.415M.) of total NWT revenue.
Physical security (Safetell): 20.8% (£2.21M.) of total NWT revenue.

31st Jan 2023 7:00 am RNS Half-year Report

" ... Group revenue increased by 10% year-on-year to £10.6 million (H1 FY22: £9.7 million), driven by a strong performance in the People and Data Management division with double-digit growth in both HCM and Access Control. ...

Safetell revenue has decreased by 14% to £2.2 million compared to the corresponding prior period. We are in the process of transforming the division with a revised strategic plan, led by our new, highly experienced management and sales team that is setting the direction for sustainable growth. Our traditional work of installing and maintaining rising screens has continued to be impacted by the reduction in the number of bank and post offices across the country but we have now further diversified our product offering by bringing auto door and entrance control into our product portfolio. The demand for these products has been continuously increasing so we have shifted our product offering to capture this market opportunity. ..."

https://www.lse.co.uk/rns/NWT/half-year-report-22phs4l5im1fv8m.html

In just the last four and a half years alone of reported accounts, NWT has spent about £3M. on R&D (£2.997M.), a sum which equates to about 72% of its current market cap. (£4.17M. at 44.5p).

So it's taken years of hefty investment into R&D to get them into their current admirable position, which has now helped to give them a significant competitive edge which would be hard to match.

9th Sep 2020 7:00 am RNS Final Results
" ... Research & Development
The Group has increased its investment by £540,000 to £873,000 (2019: £333,000) in the People and Data Management division. The investment has been focused on the cloud development of GT Connect, our SaaS platform. Clock development continued with enhancements to our existing GT10 offering and we are excited to have started development work on our next generation device. We have continued to work with our software partner on our new Janus C4 access control product. With the onset of COVID-19 we have reviewed the extent of our development work and prioritised to safeguard our cash expenditure. ..."
https://www.lse.co.uk/rns/NWT/final-results-0mfj2bn09x3t93e.html

23rd Jan 2023 7:00 am RNS Final Results
" ... Investments in research and development £0.76m (2021: £0.74m) ...
In the year ended 30 April 2022 (FY22), following three years of substantial investment in product innovation and software development, we have enhanced our solutions offering across all lines of business. This puts the business in a very strong position to execute on its strategic plan without requiring significant new development. This is already driving new client contracts and is building an extremely healthy pipeline for the year ahead. ...
Research & Development (R&D)
... The investment this year has been focused on the cloud development of GT Connect, our upgraded SaaS platform which will be launched in FY23. There has also been further development on facial recognition technology for our clocks. ..."
https://www.lse.co.uk/rns/NWT/final-results-fjybevmguogyzsg.html

31st Jan 2023 7:00 am RNS Half-year Report
" ... Investment in research and development £0.3m (H1 FY22: £0.4m) ..."
https://www.lse.co.uk/rns/NWT/half-year-report-22phs4l5im1fv8m.html

The best to to buy a share is often after a disappointment - just ask Warren Buffett.

And most mid-tier energy companies don't start out that size: they tend to start off small, and grow.

So the combination of buying at a low, just ahead of growth, can give quite spectacular returns.

Serica Energy (SQZ) for example is a c. 7-year hundred-bagger (2015-2022), after a prior s.p. collapse (to a 2015 low of just below 3p).

I'm very confident of a BENIgN Sèmè oilfield outcome for ZEN shortly.

And going forward, the company's business model for growth looks compelling, as set out by MarketGunslinger:-

MarketGunslinger Posted in: ZEN Posts: 691 Price: 0.95 No Opinion
RE: SIGNED SPA YEMEN

" ...Their motive fits in exactly with something that AC has been saying for a long time now which is that many major oil companies are under pressure from shareholders to decarbonise their portfolios. He said this almost word for word back in the investor conference call in Feb 2022 when he mentioned

“the opportunities that come from majors and second-tier majors abandoning their overseas assets. The supermajors want to get away from any producing field that is not vital for their cashflow.” ...

I would also like to say a big hats-off to our CEO for setting out a strategy over a year ago to acquire large assets from major operators at discounted prices as they respond to pressure from the environmental lobby. For a long time it appeared that this was just a dream but with this acquisition it has proved that the strategy really does work and Zenith have now acquired a significant share in a major asset for a very low price."

https://www.lse.co.uk/profiles/marketgunslinger/?page=2

I think the Tilapia experience has made people a bit paranoid, which some trolls here are playing like a fiddle, when Benin is a completely different situation.

Benin has a good reputation for playing fair, deciding things quickly and efficiently, and for developing its O&G industry for the benefit of its people.

To come out with paranoid nonsense on the basis of elsewhere in Africa where there is corruption etc. is quite wrong.

It's funny, NicetoMichu, that you don't have a problem with people saying/suggesting that ZEN won't get Benin, but have a problem with me saying it's a 'done deal'.

And when so far on Benin I've been right, haven't I.

You're having a laugh, aren't you Paul?!

Exclusivity IS sole. That's the whole point.

How can you have two companies being given exclusivity for the same thing, at the same time?!

And you're splitting hairs, NicetoMichu.

There was a bidding process, and ZEN won it.

I'd previously posted , on 12th. October:-

"I've had a quick look at ZEN's 'competition' for the Benin Project, and it just confirms to me that ZEN should be the clear front runner.
ZEN looks to be the only listed company looking to take on the project, and the others also don't look to have the experience and track record that you would want."

So it's a done deal. If they hadn't have liked the broad terms in ZEN's bid, they wouldn't have chosen it.

The poor show, NicetoMichu, is your attempting to sew negativity where none is warranted.

Some people here seem to have remarkably short memories, and/or difficulty in reading.

Perhaps aggravated by trolls trying to pass off outdated information as current.

ZEN have already won the Sèmè project in Benin: this was very clearly announced on 10th. January:-

10th Jan 2023 9:15 am RNS Exclusivity for Block 1, Sèmè Field in Benin
https://www.lse.co.uk/rns/ZEN/exclusivity-for-block-1-s232m232-field-in-benin-copv9dcudq0024x.html

A production sharing contract is now being negotiated that could give ZEN a revenue share of USS100M.+ p.a., at great profit margins, which should be finalised within weeks.

Moreover, the last operator did not exit due to technical difficulties, which is also very clearly stated in the RNS:-
"The last operator is reported to have made infrastructure investments for an amount exceeding US$100 million prior to exiting the project due to low oil prices."

The two most comparable shares to NWT flagged up by Simply Wall St, SNX and VNET, show both how these markets are recovering, and how undervalued NWT is:-

1. Synectics (SNX), 130p, market cap. £23.13M.:-

22nd Feb 2023 7:00 am RNS Final Results

"Synectics plc (AIM: SNX), a leader in advanced security and surveillance systems, announces its audited final results for the year ended 30 November 2022.

Headlines1

• Revenue: £39.1 million (2021: £36.6 million)

• Continued turnaround of underlying operating profit2 to £1.2 million (2021: £(0.5) million)

• Underlying earnings per share: 6.9p (2021: (2.6)p) ..."

https://www.lse.co.uk/rns/SNX/final-results-ent5qy04dgh7tjg.html

2. Vianet (VNET), 75p, market cap. £21.61M.:-

6th Dec 2022 7:00 am RNS Half-year Report

"Interim Results

Momentum building and on track to deliver sustained growth

Vianet Group plc (AIM: VNET), an international cloud base provider of business intelligence to the hospitality, unattended retail vending and remote asset management sectors, is pleased to announce its unaudited results for the six months ended 30 September 2022.

The Company supplies hardware and connectivity to capture operational and sales data for customers on typically 3 to 5-year agreements. The operational alerts, performance dashboards and insights enable our customers to transform their business. Our solutions, which have been used by our customers for many years are critical in normal times and become vital during times of economic downturn and uncertainty. ...

Revenue of GBP7.18 million (H1 2022: GBP6.34 million) ...

Outlook

The bounce-back recovery experienced in FY2022 and H1 2023 has continued to develop momentum into H2 2023, giving us confidence in meeting the market's expectations for the full year, and well-placed to achieve our pre-pandemic run rates. ...

Loss from continuing operations before tax (65) ..."

https://www.lse.co.uk/rns/VNET/half-year-report-5cjfn129jpuur9o.html

LSE % GainersTop Lists
EPIC Name %
STA Star Phoenix +73%

After more than trebling yesterday, STA is currently up a further 73% today (to 2.25p), further highlighting ARA's massive undervaluation and gains potential.

Thanks for flagging that up Dab.

Marie-Claire's "We aim to ..." statement isn't intended as a description of what the s.p. has done in the past, but rather is the objective going forward.

And the directors clearly don't set the s.p., so there can be a delay between business value-creation taking place and the s.p. really reflecting that.

And in NWT's case, the decline of Safetell's traditional banking business has had a 'masking' effect on the growth of Grosvenor Technology.
So looking at the aggregate performance for the group as a whole in recent years doesn't tell the real underlying story here.

One point that Simply Wall St flags up as a 'negative' is also quite revealing:-
"Does not have a meaningful market cap (£4M)"

For me that is actually a positive, but I would agree that many investors, especially institutions, would probably prefer to buy in at a far larger market cap., even if the numbers are unchanged.
That gives retail investors who are focussed on identifying turning points ahead of the crowd an advantage.

Simply Wall St. also says:-
"Price-To-Earnings ratio (9.8x) is below the UK market (13.7x)"

That appears to be based on just the first half earnings per share of 4.89 pence, so the annualised eps is actually double that (i.e. 9.78p), giving an annualised P/E ratio of just 4.55.

Using other metrics such as the PRR (price-to-research ratio) and PRR (price-to-sales ratio) also indicate massive undervaluation here.

Then there are other big bull points that a crude 'numbers analysis' won't consider.
E.g. the strong USA exposure, with its attendant far bigger growth potential.
And the multiple regulatory and technological growth drivers.

The USA expansion has all occurred since Marie-Claire took over in 2013, and that is where the biggest and most exciting upside here lies, so you have to give her a lot of credit for that.

Recent Share Trades for Aura Renew Acq (ARA)
Date Time Trade Prc Volume Buy/Sell Bid Ask Value
22-Feb-23 16:21:56 6.45 8,888 Buy* 6.25 6.50 573.28 O
22-Feb-23 16:14:16 6.45 8,000 Buy* 6.25 6.50 516.00 O
22-Feb-23 13:09:33 6.45 7,621 Buy* 6.25 6.50 491.55 O
22-Feb-23 13:07:42 6.40 14,295 Buy* 6.00 6.50 914.88 O
22-Feb-23 12:41:36 6.40 15,454 Buy* 6.00 6.50 989.06 O
22-Feb-23 11:20:49 6.40 38,775 Buy* 6.00 6.50 2,482 O
22-Feb-23 10:25:33 6.40 5,541 Buy* 6.00 6.50 354.62 O
22-Feb-23 10:23:59 6.30 5,005 Buy* 6.00 6.50 315.32 O
22-Feb-23 10:11:49 6.30 23,541 Buy* 5.50 6.50 1,483 O
22-Feb-23 10:08:53 6.38 32,603 Buy* 5.50 6.50 2,080 O

A wave of ARA buying today has moved the bid price up 13.6%, from 5.5p to 6.25p.

I don't think that it would take much more buying of this type for the price to pop.

After ARA floated last April at 10p it closed initially at 17p, on bullish deal expectations given the quality board.

Now, nearly a year closer to a deal, and with potential acquisitions cheaper than ever, it's barely a third of that price.

But perhaps not for that much longer.

LSE % Gainers Top Lists
EPIC Name %
STA Star Phoenix +225%

21st Feb 2023 5:16 pm RNS Audited Annual Report for Year Ended 30 June 2022

" ... The Company's key focus remains on securing new opportunities to provide future growth and value for the Company and its shareholders. Over the last year, the Company has considered, reviewed and evaluated numerous projects and investment opportunities with a view of securing attractive targets.

The Company is pleased to report that it is currently in advanced discussions on a selected number of investment and joint venture opportunities and is focusing its efforts to progress to the next stage. The Board believes these new opportunities would offer shareholders exposure to significant plays in the energy sector and looks forward to sharing the details of these potentially value enhancing opportunities should they progress to binding deals. ...

As at the reporting date (17 February 2023), the company had a cash balance of approximately US$457,000. Management believe there are sufficient funds to meet the Group's working capital requirements for the next 6 months. The ability of the Group to continue as a going concern beyond that timeframe is dependent on securing additional funding through the issue of shares and/or debt to fund its activities. The Company is currently seeking other opportunities to further expand its operations in other geographic locations. ..."

https://www.lse.co.uk/rns/STA/audited-annual-report-for-year-ended-30-june-2022-0xjvktsytkl8700.html

Interesting to see STA more than treble today to a market cap. of £1.96M. (1.3p/share), from a similar market cap. to ARA's at present, and on similar prospective deal news to that which ARA announced last month.

But with far less cash than ARA currently has, and far higher cash burn.

Ten and a half months since ARA's IPO - I've think we're now entered the 'sweet spot' in terms of sufficient time to identify a suitable RTO target.

So there may well not be much longer to buy in ahead of a suspension ... and with any proposed RTO likely to be at a big premium to the current s.p. of just 6.375p.

Excellent summary MG, thanks.

These sorts of irrational dips historically are often shown to be excellent buy opportunities, that don't last long.

Fortunately, Benin seems to be the polar opposite of Congo in terms of professionalism and integrity, and there shouldn't be long to wait there for a quite stellar outcome for us, which could well help to catapult ZEN to much higher levels.

Paul,

The best solution may be a negotiated settlement and compromise.

Congo will know that the monies are owed, and if they act 'above the law' it won't help foreign investment into the country.

Either way though, ZEN has more than enough going for it elsewhere, so the Congo issue is now really just a distraction.

Market cap. now is just £11.7M., which is absurdly cheap.

And with plenty of near term positive newsflow likely too.

It's good that the 'boil has been lanced', and we can now move on, without this weight hanging over us.

Real buy opportunity now, and I expect a strong rebound from bargain this level.