Valuations in the technology sector have been soaring across the board, and new entrant Quixant (QXT) is no exception. The supplier of specialised computing platforms used in casino gaming and slot machines has seen the value of its shares more than treble since listing them on Aim a year ago.
Quixant did not raise much money when it came to market - just £3.9m in a placing priced at 46p a share - but management didn’t mind. They own over 60 per cent of the company’s shares and taking Quixant public has increased its visibility, status and branding.
Quixant currently has a 5 per cent market share in the sizeable gaming-machine market, but hopes to increase this by enticing the largest game manufacturers - Tier 1 and 2 customers, which generally produce their own games in house - with lower-cost outsourced gaming software and hardware. These companies are loathe to change suppliers of such a critical element of their games, but if they do then each business win could bring in revenues in excess of $17m (£10m) per year.
Quixant began volume production for two new Tier 2 customers in 2013, and has been supplying fast-growing Tier 1 customer Ainsworth since 2007. Looking ahead, broker finnCap forecasts adjusted pre-tax profits of $7.1m in 2014, giving EPS of 8.7¢, up from $6.0m and 7.6¢ in 2012.
QUIXANT (QXT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 159p | MARKET VALUE: | £103m | |
| TOUCH: | 155-163p | 12-MONTH HIGH: | 164p | LOW: 49p |
| DIVIDEND YIELD: | 0.6% | PE RATIO: | 34 | |
| NET ASSET VALUE: | 24¢ | NET CASH: | $4.9m | |
| Year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (p) |
| 2010 | 5.3 | 0.6 | na | nil |
| 2011 | 9.1 | 1.3 | na | nil |
| 2012 | 21.6 | 5.0 | 6.9 | nil |
| 2013 | 24.2 | 6.0 | 7.8 | 1.0 |
| % change | +12 | +20 | +13 | - |
Ex-div: 30 Apr Payment: 16 May £1=$1.65 | ||||
