A protracted acquisition process appears to have led to IQ Holdings taking its eye off the ball and reporting disappointing figures.
The market research firm acquired three businesses from Aim-quoted Media Square at the end of January 2009. The announcement was not made until after the financial year end but talks would have started before that.
IQ increased its loss from £161,000 to £440,000 on revenues rising from £418,000 to £908,000 in the year to September 2008. IQ is expected to remain in loss in 2008-09 although it should start to benefit from the integration of the latest acquisitions.
These figures were not reported within six months of the year end and the shares in IQ were suspended on 1 April. They returned from suspension 0.025p higher at 0.18p each, which values the company at £2.13m.
The balance sheet does not reflect the recent acquisitions or the associated fund raising but IQ is likely to need more cash if there continues to be a cash outflow – which is likely.
A profit of £350,000 is forecast for 2009-10, which would put the shares on little more than six times earnings. IQ still has to prove that it can achieve profitability. The second half of 2008-09 could provide the first indications that it is on its way to achieving that goal.
© 2021 Aim Micro. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.