News blog
Datong
- BY: Andrew Hore |
- POSTED: 16/03/2011 |
Surveillance technology developer Datong says that profits are expected to be in line with expectations this year but investors’ appear to have been worried by the drop in third party product revenues.
At 54p a share, down 7p, Datong is valued at £7.47m and it is trading on 18 times house broker Canaccord Genuity’s 2010-11 earnings estimate. The multiple falls to six in 2011-12.
Strong sales of Datong’s own products is offsetting the decline in lower margin third party product sales in profit terms but group revenues in the year to September 2011 are expected to be lower than the previous 12 months.
Growth in the Americas is slightly ahead of expectations helped by new product launches.
However, order intake from the Rest of the World has slowed as customers’ wait on budgets and procurement cycles become more protracted. Datong had a particularly successful first few weeks of the year in terms of winning orders and that was not likely to continue but there are concerns that the weak order intake could continue particularly, in relation to third party products.
Download the March edition of AIM Journal at http://www.hubinvest.com/AIMPDFMarch2011_18.pdf
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