News blog
Datong
- BY: Andrew Hore |
- POSTED: 02/12/2008 |
Surveillance technology developer Datong has been hit by delayed contracts yet again.
Datong’s revenues are difficult to forecast because of delays in signing contracts and deliveries. This has happened more than once in its quoted life. The latest orders, worth £2.9m, were supposed to be signed in the first half but they have been delayed until the second half.
The shares slumped 9.5p to 55p each, which values Datong at £7.61m.
Datong had already warned about the delays at its AGM in September 2008.
The interim loss was slightly higher than expected at £1.62m in the six months to September 2008 – compared with a small profit in the first half of last year. A move to new premises and higher marketing costs also affected the figures. Revenues slumped from £3.52m to £1.51m.
The business as a whole is resilient it is just lumpy because it is difficult to predict when orders will come through.
Datong was originally expected to report full year profits of £2.3m but the delays mean that house broker Teathers is currently forecasting £2m. That represents a significant improvement in the second half but that is not beyond Datong’s abilities. The business has always been second half weighted.
Datong will also benefit from the strength of the US dollar because the US is a key market.
The shares are trading on just over five times prospective earnings. Net cash is forecast to be £2.7m at the end of March 2009.
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