TW Article25 May 2016 23:13
Following their appointments last year and the announcement of results for the company’s year ended 31st January 2016, I’ve chatted to Coms plc (COMS) CEO Mark Braund and CFO Spencer Dredge.
The year also saw disposals and restructuring to reposition the company as focused on smart technology for buildings and commercial spaces - and meant a £2.18 million loss. However, stripping out £1.49 million of this from now discontinued operations and £1.44 million of “integration and transactional costs” sees a £0.74 million adjusted profit. Net cash at the year-end was £1.05 million.
Post this, the company has announced a £1.3 million acquisition (of software applications for ‘smart’ buildings and commercial spaces business, Connect IB) and a £3.1 million (gross) placing at 1.4p per share to fund it, “as well as providing working capital to support the integration of Connect IB into Coms and for the continued strategic development of the enlarged group”.
This sees Braund and Dredge not needing any further cash for their organic growth plans, though there may be in conjunction with consolidating, product-enhancing or product-adding acquisition opportunities. However, there is a stated “increasing appetite from institutional investors who are keen to take part in any future funding event”, which should aid the company in limiting any dilution of existing shareholders.
Com’s continuing business (Redstone, which designs, installs and services IT and ‘smart’ building infrastructure) also delivered 36% revenue growth in the year, to over £40 million, and its performance reportedly “continues to improve, with strong demand seen in its core markets”. The results statement then adds that “through better management systems, ongoing product and systems innovation and proactive cross-selling of services… the group's prospects for leveraging organic growth opportunities from our core business have improved considerably”.
The relatively new management here have already achieved much and, from our chat, it seems clear that the market opportunity for smart technology for buildings and commercial spaces continues to grow at pace. The shares have responded to a current circa 1.475p, capitalising the company at around £24 million.
Based on the profit noted earlier, such a valuation looks rich - but the growth potential from here looks exciting. As such, I’ll certainly continue to monitor progress, with the shares now on the watchlist.
- See more at: http://www.*************.com/views/21029/coms-full-year-results-and-chat-with-ceo-cfo-exciting-growth-potential#sthash.yoAOOurI.dpuf
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