News blog
Synchronica
- BY: Andrew Hore |
- POSTED: 22/09/2009 |
Synchronica has signed a number of additional mobile telecoms network operators to its services and the revenues will show through in the second half of 2009 and next year.
Synchronica develops software for mobile push email and has developed its own handheld device to be sold in emerging markets. The handheld device should be launched at the end of 2009.
Revenues grew from £190,000 to £1.33m in the six months to June 2009. The loss declined from £2.82m to £2.49m.
Synchronica’s technology can be used on the vast majority of mobile phones and enables them to be used like Balckberrys. Nine new customers have been signed up this year and most will launch the service in the fourth quarter. Full year revenues of £4.94m are forecast.
In September 2008, Synchronica acquired the technology of Aim-quoted AxisMobile for up to 85.1m shares. Synchronica raised £5.1m at 3p a share when it bought these assets. This technology has been integrated with Synchronica’s existing technology and the combined product is called Mobile Gateway 4. The deal also brought with it some important network customers who are buying more software licences.
Revenues are generated from selling perpetual licenses based on a fee of around $2 per user or annual licenses for around 80 cents per user. Perpetual licence holders also pay annual support fees. Both types of sale require professional services to help with implementation.
The focus is on network operators in emerging markets, such as eastern Europe, Africa, the Middle East and Latin America. Internet penetration rates are lower in these regions and mobile is a more convenient way of accessing emails.
There was a cash outflow of nearly £3.7m in the first half of 2009 – if capitalised development spending is included. That had used up nearly all of Synchronica’s cash. In July 2009, Synchronica raised a further £4.7m gross at 2.5p a share. Management believes that this will last until the business starts generating cash.
Shares in Synchronica fell 0.75p to 3.75p each, which values the company at £21.7m.
Synchronica should move into profit in 2010. House broker FinnCap forecasts a profit of £3.08m on revenues of £11.9m. Equity Development predicts profits of £2.4m on revenues of £11.8m but that profit figure includes an amortisation charge of £930,000.
The shares are trading on seven times FinnCap’s forecast earnings for 2010.
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