News blog
Lo-Q
- BY: Andrew Hore |
- POSTED: 19/02/2010 |
Virtual queuing technology developer Lo-Q reported growth in profits even though trading was dampened by wet weather.
The latest figures are for 10 months to October 2009 which flatters the comparisons. Revenues increased from £13.5m in the previous 12 month period to £17.3m. Revenues could have been £3m or more higher with better weather. The pre-tax profit improved from £1.85m to £2.39m. Probably around 50% of that improvement is due to the fact that two unprofitable months were not included in the figures.
Theme park operator Six Flags, which is Lo-Q’s main customer, remains in Chapter 11 bankruptcy protection in the US. Six Flags hopes to publish plans to leave Chapter 11 in March ahead of the main theme park season.
Lo-Q continues to invest in new technology and products. The latest version of its Q-bot technology is for water parks but the improvement could be used elsewhere. Development spending will increase from around £400,000 to £1m. Last year £309,000 of the spending was capitalised.
Net cash increased from £2.56m to £4.44m in the 10 months to October 2009. Lo-Q could still generate cash this year even after its higher development spending.
The greater development spending will hold back profits this year, although it depends how much is capitalised. House broker Arbuthnot forecasts flat profits of £2.4m for 2009-10 but this represents an underlying improvement of more than 10% - due to the loss of around £250,000 in the two extra months.
At 79p a share, Lo-Q is valued at £12.6m.
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