21 May 2013 07:00
21 May 2013
Quixant plc
("Quixant" or the "Company")
First day of dealings on AIM
Placing raising, in aggregate, approximately £4.55 million
Market capitalisation at placing price of approximately £30 million
Quixant (AIM:QXT), a leading provider of specialised computing platforms for gaming and slot machine applications, is pleased to announce the admission today of its ordinary shares to trading on the AIM market of the London Stock Exchange and the commencement of dealings in its ordinary shares under the ticker QXT.L.
As part of the admission process, the Company raised gross proceeds of £3.88 millionthrough an over-subscribed placing of 8,434,782 new Ordinary Shares, at a placing price of 46 pence per Ordinary Share (the "Placing Price"). In addition, 1,452,174 Ordinary Shares were placed on behalf of existing shareholders ("Vendors") at the Placing Price, raising £0.67 million for the Vendors. The Ordinary Shares have been placed with a number of institutional investors and High Net Worth Individuals.
On Admission, the Company will have a market capitalisation of approximately £30 million at the Placing Price.
Overview:
·; Headquartered in Cambridge, UK, Quixant designs and manufactures complete advanced hardware and software solutions ("Gaming Platforms") for the pay-to-play gaming and slot machine industry, supplying manufacturers of gaming and slot machines.
·; Quixant's key strengths are:
o High quality, differentiated products;
o Established Far Eastern manufacturing capability;
o Experience in the gaming market;
o Market opportunity; and
o Brand recognition.
·; The Board's ambition is to continue to grow the business so that the "Quixant" name becomes synonymous with the standard for specialised gaming computer systems.
·; Quixant is capitalising on its progress made to date in broadening the customer base, securing new long-term customer wins and building the brand.
·; Quixant was founded in 2005 and has a strong financial track record, and the Directors believe that the current sales pipeline is supportive of continued substantial growth in 2013 and 2014.
·; Globally there are approximately 7.9 million gaming and slot machines in operation, and market analysis predicts that the total gaming market will grow by more than 9% over the next three years.
·; Quixant's estimated market share is currently below 1%.
·; The purpose of the IPO is to provide working capital headroom as the Company wins further contracts with larger customers, raise the Company's profile in the industry and incentivise current and future employees.
·; Smith & Williamson is Nominated Adviser and Broker to the Company.
Nick Jarmany, Co-Founder and MD of Quixant, commented: "I am delighted with the support received from investors who recognise the enormous growth potential for Quixant. Public company status will support Quixant's continuing expansion as we broaden our customer base globally, generating further profitable growth by building on our leading proprietary technology, robust fundamentals and strong growth drivers."
For further information please contact:
Financial PR: | |
Newgate Threadneedle | Tel: +44 (0) 207 653 9850 |
John Coles, Fiona Conroy, Hilary Millar | |
Quixant plc | Tel: +44 (0) 1223 892696 |
Nick Jarmany, Managing Director | |
Jon Jayal, General Manager | |
Nominated Adviser and Broker: | |
Smith & Williamson Corporate Finance Limited | Tel: +44 (0) 207 131 4000 |
Azhic Basirov, Siobhan Sergeant, Oliver Cummings | |
BACKGROUND INFORMATION
Quixant, founded in 2005, designs and manufactures complete advanced hardware and software solutions (Gaming Platforms) for the pay-to-play gaming and slot machine industry.
The Company currently has a total of 58 employees and is headquartered outside of Cambridge in the UK, with its global sales team, finance, marketing and administrative functions based at its head office. Its US subsidiary, based in Las Vegas, is responsible for sales and sales support to the North American market. Quixant has its own manufacturing and engineering operation in Taiwan, which has evolved with the rapid growth of the Company. Quixant's Italian subsidiary, Quixant Italia, houses the Group's software engineering and customer support team.
Summary Financial Information
2012 | 2011 | 2010 | |
US $'000 | US $'000 | US $'000 | |
Revenue | 21,577 | 9,100 | 5,303 |
Gross Profit | 9,900 | 3,792 | 2,418 |
EBITDA | 5,081 | 1,440 | 715 |
Profit Before Tax | 4,990 | 1,318 | 622 |
Profit After Tax | 3,791 | 1,088 | 608 |
Net Assets | 5,889 | 2,021 | 968 |
Net Cash Infow | 852 | 806 | 112 |
Net Debt | (476) | (1,391) | (527) |
Placing Statistics
Placing Price per Ordinary Share | £0.46 |
Number of Ordinary Shares in issue before the Placing | 56,200,000 |
Number of Placing Shares | |
- New Ordinary Shares | 8,434,782 |
- Vendor Shares | 1,452,174 |
- Total | 9,886,956 |
Number of Ordinary Shares in issue following completion of the Placing | 64,634,782 |
Estimated net proceeds of the Placing receivable by the Company | £3.10 million |
Estimated expenses of the Placing payable by the Company | £0.78 million |
Market capitalisation of the Company at the Placing Price following completion of the Placing | £29.72 million |
Placing Shares expressed as a percentage of the Enlarged Issued Share Capital | 15.30% |
Large Market Opportunity
In 2012, it is estimated that approximately 450,000 new/replacement gaming and slot machines were built. Quixant shipped approximately 18,500 Gaming Platforms in 2012. Market analysis predicts that the total gaming market will grow by more than 9% over the next three years. Quixant's market share of the total installed base of gaming and slot machines is currently below 1%.
Given the nature of the gaming industry, in particular, the highly regulated environment in which they operate, gaming and slot machine manufacturers tend to develop long term working relationships with suppliers which can provide a consistent and reliable product.
Quixant has positioned itself as one of the leading suppliers of specialised gaming computer systems, capitalising on developments within the global gaming and slot machine manufacturing sector. Quixant intends to significantly increase its market share as the trend for manufacturers to outsource their gaming hardware production to specialist suppliers continues, and accelerates as PC technology becomes more complicated and manufacturers target new markets with varying regulatory regimes.
Key strengths
High quality, differentiated technology
Quixant provides an all-in-one solution, based on PC technology with hardware features alongside software, developed by Quixant specifically to address the requirements of the gaming industry. Products feature innovative mechanical designs which are optimised for operation in the gaming and slot machine environment. Quixant has secured a patent on aspects of its enclosure design and is in the process of securing further patents.
The software developed by Quixant communicates with the electronic hardware and connected gaming accessories in gaming and slot machines. Using this as a foundation, Quixant's customers can focus on game development which ultimately has the greatest impact on their commercial success, as well as reducing the time required to bring new games machines to market.
Established Far Eastern manufacturing capability
Quixant's manufacturing operation was established in Taiwan in 2007 and now has over 30 employees, enabling the delivery of high-value design alongside competitive costing. The management team in Taiwan has significant experience in computer hardware manufacturing and is headed by Co-founder, Chen-Tai (JJ) Lin.
Quixant is, therefore, able to couple high-value design capability with Far Eastern manufacturing cost competitiveness.
Experienced and aligned management team
With over 25 years of combined experience in supplying PC based Gaming Platforms to the gaming and slot machine market, the management team at Quixant has established contacts with a significant number of gaming and slot machine manufacturers worldwide. Management has a detailed understanding of the overall technology and regulatory requirements of the global gaming industry. Quixant's products have been designed to be compliant with the regulatory requirements in most major gaming jurisdictions and markets, worldwide.
Leading Products
Quixant produces a range of Gaming Platforms - high performance, PC compatible systems designed and tuned specifically to meet the complex needs of the gaming and slot machine industry.
When a gaming and slot machine manufacturer develops a new machine, it needs to pass a regulatory approval process in each jurisdiction in which it will be sold or operated. This is an expensive and time consuming process, with every subsequent minor variation requiring re-approval in advance and any unauthorised change potentially leading to a manufacturer experiencing regulatory consequences. It is therefore crucial for gaming and slot machine manufacturers to secure a stable source of computer hardware and software from trusted suppliers.
The development of Quixant's Gaming Platforms is based on the following design principles which the
Directors believe are essential characteristics for gaming and slot machine applications:
·; Long lifecycles on key components to enable a 3- 5 year supply lifetime of the Gaming Platform
·; Low power consumption components and, where possible, the ability to cool the Gaming Platform without fans
·; High reliability
·; Tailored electronics to enable direct interface with a range of third party gaming and slot machine hardware (e.g. bill acceptors, coin hoppers and ticket-in, ticket-out machines)
·; Compliance with the regulatory requirements imposed on machine manufacturers in major global gaming jurisdictions
·; High performance graphics processing capabilities and support for multiple screens
·; High degree of security against hacking and unauthorised copying of game software and computer hardware
·; Ability to customise Quixant products easily in order to match the requirements of individual customers
Functionality includes:
·; Interfaces to specialised gaming peripherals (e.g. bill acceptors, ticket-in, ticket-out machines, coin hoppers)
·; Ability to store critical game data ("player tracking data") in memory which is preserved in the event of power failure
·; Security features required to ensure integrity of software operating on the machine and the hardware in the machine itself
·; Logging capability, even when the gaming and slot machine mains power is switched off, to detect, for example, intrusion into the machine cabinet
Quixant is an AMD Fusion Partner Elite Member and also a Microsoft Windows Embedded Silver Partner.
Quixant also supplies several additional complementary accessory products to its Gaming Platforms which include monitors, storage devices and operating system licenses.
Board of Directors
Michael Peagram (69), Non-executive Chairman
Michael has a background in the pharmaceutical and chemical industry. As managing director of Holliday Chemical Holdings Plc, he oversaw the international expansion of the company, leading to a listing on the Official List in 1993 and the subsequent sale to Yule Catto Plc in 1998, following which he remained as deputy chairman until 2007. Subsequently, Michael has held various non-executive director positions, principally as chairman, for growing AIM listed companies such as CRC Group plc (computer and mobile phone servicing) and RMR plc (internet conferencing). He is currently non‑executive director of Hangar8 plc along with a number of other appointments. Michael is also an active investor in numerous private technology companies and is involved with a number of community based business and technology development ventures. He has a doctorate in Chemistry from Oxford University and an MBA from Manchester Business School.
Nick Jarmany (51), Managing Director
Nick is a founding director of Quixant and has brought extensive management experience and computer engineering knowledge to the Company. Nick has a background in the technology industry and he was employed by Densitron Technologies PLC ("Densitron") for 22 years. In this time he held numerous roles in design, engineering, sales and, finally as, Group Technical Director. Nick had overall responsibility for Densitron's gaming business strategy, led the design process and negotiated with key suppliers and customers in the USA, Europe and Asia. He has an honours degree in Electronic Engineering from the University of Sheffield.
Gary Mullins (42), Sales Director
Gary is a founding director of Quixant and has a proven track record in technology sales and marketing. He was employed by Densitron for more than 10 years in sales and marketing. At Densitron, Gary was responsible for securing contracts with numerous multi-nationals. Gary has a proven track record of winning large orders for technical products from major companies. Prior to founding Quixant, he was sales director at NTera Limited, a nanotech electronic paper displays developer. He has an honours degree in Electronic Systems from the Royal Military College of Science.
Chen-Tai (JJ) Lin (50), Manufacturing Director
JJ is a founding director of Quixant and has 23 years' experience in computer hardware manufacturing. JJ's previous roles include leading the design teams at GIT Technologies Ltd and TC-Tech, developing automotive test systems and managing the hardware production at Intimate Partner Co., a major EMS house, producing motherboards and graphics cards for large Taiwanese brands. JJ was the General Manager of Densitron Computers Taiwan Ltd, a manufacturer of long-life custom embedded PC products for the gaming market, and became the General Manager of Techware Technology Co. Ltd, a Taiwanese Windows CE development house. He has a degree in Electronic Engineering from the National Taiwan University of Science and Technology.
Cresten Preddy (59), Finance Director
Cresten is an experienced accountant with 41 years in practice. Cresten began her career at Baker, Rooke & Amsdoms before moving to Arthur Andersen. She left Arthur Andersen after 18 years moving to NCL Investments Limited, to become its financial controller and company secretary. In April 2004, Cresten established her own practice, providing accounting services to a variety of clients as a qualified sole practitioner. Cresten has worked with and advised Quixant since July 2009 and joined the Company in July 2012. Cresten is a Fellow of The Institute of Chartered Accountants in England and Wales.
Guy van Zwanenberg (58), Non-executive Director
Guy has 40 years' experience in industry and practice. He qualified as a Chartered Accountant with Grant Thornton and then spent three years working with James Gulliver. Guy subsequently moved to become UK Finance Director of an American computer accessory company which was taken public in 1989. In 1991, he established his own interim financial management business and has since been involved in a number of SME businesses providing strategic and financial help. He joined Gaming King plc in 1998 on a part time basis as Finance Director and became Company Secretary and non-executive director in 2006, remaining as a non-executive director when the company listed on AIM as Sceptre Leisure plc in 2008, and where he sits on the Audit and Remuneration committees. Guy is both a Fellow of The Institute of Chartered Accountants in England and Wales and a Chartered Director.