the opportunities of investing in 7 Oct 2010 11:56
the opportunities of investing in Promethean World outweigh these risks.
UK schools have led in adopting interactive whiteboard technology, which was in 70% of its classrooms by the end of 2009. That's pretty saturated -- and sales here are indeed falling -- but the UK accounts for less than 10% of its total sales.
In the US, only 26% of classrooms have the same technology, falling to 8% in Europe, and a mere 2% in the rest of the world. According to the same research, there are 29 million classrooms in that latter category -- dwarfing the 4 million in the US and less than 1 million in the UK -- so plenty of headroom in countries such as China.
Promethean World is the world number two in this growing market. Incidentally, the number one, Canada's Smart Technologies, has also seen its share price slide since its own IPO in July, presumably on similar fears.
Obviously both companies face new competition, but Promethean World is trying to build a moat both with a newer segment called Learner Response Systems, which enables a teacher to poll the class, and where it's the global leader. It also has a massive online collaboration community called Promethean Planet, which features material from the likes of Dorling Kindersley.
With the P/E of 10, decent growth, net cash of £16.2 million, and a very well-covered maiden dividend yield of 2.5%, Promethean World offers growth at a reasonable price. In addition, if growth returns to anything like previous years, the shares should soar on a re-rating.