Surveillance technology specialist Digital Barriers (DGB) may still be heavily loss-making but, after last month's £18m fund-raising, and following a swathe of bolt-on acquisitions in recent years, the group looks ready to go for growth.
The need for fresh funds actually reflects the group's aspirations - as the company wins more significant contracts, its working capital requirements are likely to shift. And contract progress looks good. For instance, in September Digital Barriers announced a £1m contract win for its ground sensor technology with an Asia-Pacific government. The group has also made the first sale of this technology to a US defence customer, and won a contract extension with a UK government agency - worth £2.3m. Meanwhile, the group's TVI video surveillance offering is making progress, having won a small contract with a US Federal agency earlier this year. Given the data intensive nature of using mobile networks for video, management sees plenty of opportunities for its data efficient TVI product.
Broker Investec Securities expects the group to remain loss-making for a few years yet and doesn't anticipate a full-year pre-tax profit until end-March 2016 - of £1.9m, with EPS of 3.4p.
DIGITAL BARRIERS (DGB) | ||||
|---|---|---|---|---|
| ORD PRICE: | 169p | MARKET VALUE: | £109m | |
| TOUCH: | 165-172p | 12-MONTH HIGH: | 197p | LOW: 140p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 61p* | NET CASH: | £0.72m | |
| Half-year to 30 Sep | Turnover (m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 8.08 | -7.06 | -15.2 | nil |
| 2013 | 9.01 | -7.23 | -13.5 | nil |
| % change | +12 | - | - | - |
*Includes intangible assets of £29.6m or 46p a share | ||||
