Great AGM today. (Have stopped for lunch in service station on the way home)
Met Mike Lord, John Sherman, and several others...and having met & talked to them feel very confident of how JSJS Designs (now LightwaveRF Plc (LWRF, I think the ticker will be)).
To sum up though...all VERY positive, and anyone in now is in at the start of some great things! Mike and John S kindly talked us through the strategy for future development...I didn't write it all down, so will say what I can remember.
The name change/ board change all make huge sense, as it is in line with their focus on expanding and developing the products to reach into every part of the home,also in conjunction with other companies' existing household products (like that music system someone linked to a while back).basically, the more items in the house that have the LightwaveRF chip/board in, the more that can be controlled from one point...some of the suggestions were so cool!
The Light show Megaman attended (was it yesterday ? in Germany?) proved very popular, and the LightwaveRF section had people 4 deep interested in the products.
Megaman doing V. Good job of getting products out there, and will, for now) be concentrating on lighting products abroad (7 main ones to start with) The hope is, once folk have the lighting, they'll come back for the rest! They are also looking to take this to other countries worldwide, eg Canada, US and some others (they did name three more they are looking into just now, but i forgot to write them down) and will looking to find other big distributors to cover these countries. Now that a company as large as Megaman are on board, they are finding that other companies have more confidence they aren't a fly-by-night company, and are out of financial problems and are therefore more enthusiastic to join the gravy-train (to mix metaphors :-) )
Warwick Uni testing going well - very useful exercise- and is being expanded further. Energy savings have been shown to be between 25 & 40% already (for a university that size is more than £1M savings p.a), so the cost of installation is quickly recovered.
Work is going into developing a universal web-based site to supercede having many different Apps for different platforms, so that it will fit any gadget/ screen that has access to the Internet, and so customers can be in touch with their home/the RF system they control from anywhere. They are aiming at making it smart, beautiful, intuitive...
Development will also go into useful data mining (we talked about whether it was intrusive or not, and everyone who took part in the Warwick Uni trial would rather be part of it, and agreed it was not intrusive at all, since the information is not particular to individuals) the information then being available to, for example, utility companies to help them plan and direct energy most usefully.
Now that they can concentrate on what they're good at, they can devolop the company to cover a wider range than any others are offering.
I think there was lots more, but that's enough for now. Suffice to say, I would be happy to chuck money at this now, fully confident they have tightened up how they are working, and that this is the transition from a small company that was struggling to take a dream forward into a medium-sized, more disciplined, company with a big - no, potentially huge - future!!
Appreciate your kind words. I will go and read Alynch's account, she seemed very on the ball, and quite heavily invested, I got the impression. Megaman are doing only lighting abroad, I think here they are selling everything. Also, it is early days with the heating stuff.
Thanks Chip_Scashtin. You views about the meeting correlates with that of Alynch on advfn. It must be just you two that were at the AGM.
Hopefully this will all come to fruition, hoping the new board walks the walk as well as talking the talk. Previously they have been talking on what they will do with regards to expansions to other regions etc. without anything coming of it.
definitely the Warwick link up provides an opportunity to further develop the software to suit commercial enterprises and I am glad , based on your report, that this is coming good.
Megaman only concentrating on lightning is a bit of a downer on first reading. I would have hoped that if they put their substantial financial muscle into that, then that would have given us an edge. then again I suppose they may wait to gauge acceptance of the heating range before committing.. so not surprised.
I am still holding steady and feel that we may be near the tipping point .. if all pans out well over the next few months then we would really take off.
40p = 0.80 in old money, as you might say. But the price is very hard to gauge, as we have no idea of any of the figures after the Megaman deal last October.
The AGM was fun. Only two shareholders attended. Obviously nothing market sensitive could be divulged to us, but:
Just back from the biggest world lighting fair in Germany, and the Lightwave bit of the Megaman stand was packed.
Warwich University project very useful for the company, had allowed them to develp the software in lots of ways, to the point where they were monitoring and controlling usage down to individual rooms, and saving the university a significant chunk of their large energy bill (I don't trust my notes for numbers). Project being expanded to more buildings. NB they are not aware of any competitor who can offer monitoring and control of the energy and lighting usage of an entire organisation in such a detailed and effective way. But also NB (my thought) Warwick have obviously been tolerant of working with development software, not sure how close to product that setup is.
Quite excited about the prospects for harvesting data from users and selling that to utilities etc (but meeting some concerns re privacy -- I wonder how that will play in Europe).
Megaman are handling lighting only abroad (and not sure if covering wordwide), Lightwave actively looking for other foreign distributors, not to have eggs entirely in one Megabasket.
Basically on all fronts they were exhilaratingly positive, to the point that my concern really was how would they be able to keep a handle on things with so many opportunities laid out in front of them.
Oh, and they are going to try to get the results out a bit quicker. I'm going to give it a Buy again, because I think the new business will get some interest from the City, at the new respectable share price.
I think there is a slight risk of volatility with the 50 to 1 consolidation, and we won't really be able to quantify the situation until the next set of results.
Good Luck All, and all at LightWaveRF. I wonder if this board will transfer OK, I might email iii.
Now not so sure. I got out at .77, with the broker talking of panic selling (it's expensive but occasionally you get a bit of feedback). But now back in at .78. Thinking is: (1) SP has had a chance to tank but hasn't so maybe it won't. (2) it flicked up a hundredth today which reinforced (1). (3) I am told by my mate that institutions won't touch sub-penny shares, and I am worried that the risk is now on the upside -- institutions may come in, and likewise tips, after the consolidation and general refurbishment of the company. (4) dammit - this is a good company and maybe not one to mess around with any more.
Basically no idea.
I am thinking of schlepping up to Brum for the AGM. 11am is a bit hard work from here.
Yes. I guess the reason to stay out is that until the interims then we really don't have much idea what the figures are like this year. I think I will stay out until the consolidation, it's only 3 weeks to April 3, and the general 50 to 1 uncertainty should keep things subdued. So taking 0.8 as the middle yesterday then 40p is par. For the record.
Chip_scashin: good answer and exactly my thoughts. It's creditors that bring down a business and this is limited here. Megaman are even doing some of the support. A small profit could be enough to pay R&D. Sales are up, the product works and distribution routes well established. The management appear to have grasped the nettle. The interims are key. Any announcements before will help too. Perhaps new management will bring out results more promptly. Interesting times.
Not sure what you mean. Costs are in R&D and tech support, warehousing which is being phased out now they are being distributed by Megaman. The more I read the results the more I think I won't be out for long, and will be lucky to get back in for what I sold for. Last year they did their interims for the period to end March in June, much quicker than the finals, and that will be a better update of the post-Megadeal climate. In particular we don't know what margin Megaman are paying, but I bet it aint much. Their ambitions are startling: they want to create a whole ecology round their comms structure, which security etc, 3rd party products, all going through Lightwave, and they may well get there, they seem to have a popular product.
Yes I agree I'm out as well. I've been involved in some disastrous consolidations in the past, so always run for the exit when the news hits.
This has all the makings of a good little company but the 50:1 seems rather overdone to me and will leave precious few shares in the market. Could be a buyout looming or something else, but leaving so few shares in circulation seems rather odd to me. I have made a cracking profit so as I was told and have now learnt take it.
Good luck to holders I hope it works out.
This is now in free fall, so sitting on a comfortable gain, I am out. Sorry for the Buy rec, I have been wrong before.
I suspect that the market is spooked by the share consolidation, unless there is something in the results I have missed. There was a recent consolidation in Fastjet which was disastrous, and no doubt a few punters are anxious not to get caught again. I will be looking to buy back when it settles down -- which it probably will have very soon, knowing my luck. Which probably amounts to a Hold recommendation, but I will restrain myself from offering advice for a bit.
Would you be hoping to buy some shares if the price fell a bit, Jak?
Chairman says: "The financial outlook for the business is now much more positive and the business expects to show a profit in the current financial year. The current order book is £2.1m. Our current order book alone, together with first quarter invoicing of £759,000, will result in a minimum turnover of £2.6m in FY2014, a 147% increase on FY13. The business is now set to start to fulfil its potential in this market of the future."
I can't really improve on that. The board changes and consolidation are all saying that this lot are getting themselves organised for the big time. They will probably improve their spelling and grammer for the next half year as well.
IMHO, DYOR, GLA!
As expected they are dreadful, big losses, burning cash and a technically insolvent balance sheet.
Revenue of £1,054k leads to a bottom line loss of minus £809k. Assuming that the gross margin and fixed costs stays constant then the revenue needs to increase by 170% to £2,855k just to break even. Revenue needs to treble to provide a sensible return on capital. The company trumpets possible revenue of $2.6m for the years but this will still lead to more losses.
Cash burn continues apace, supported by placings and debt finance.
The consolidated balance sheet shows a technically insolvent position; Total Equity is minus £1,143k. Cash as at 30 Sept 2013 was minimal and the company continues to survive only due to soft friendly loans.
We believe that this launch will provide the mass market platform we need and will provide much better home heating control than the British Gas Hive and Google Nest products recently heavily reported.
"In April 2013 we completed a fundraising by way of a placing of new ordinary shares that raised gross proceeds of £535,000. The net proceeds of the Placing are being used to fund the Company's working capital requirements and product development. As always with a growing business working capital management will remain key to ensuring success for the future and we will be looking at stock financing tools to supplement our existing invoice discounting facilities to ensure a smooth transition to profitability which we expect to achieve in FY2014.
... And subsequently the Megaman deal where orders are paid for in advance reducing the working capital burden
The orders announced since November are actually $800k plus $3.28m plus £100k. This equals possible large profits methinks. Annoyingly we aren't going to find out how large for some months due to it takes so long for this lot to add it all up. They did say they were cutting admin costs and margins were 40%-ish (not known for Megaman). But the £733 does concentrate the mind a bit, how have they managed?
Nice little company here, been in since the .0020 days and intend holding for a fair old time yet. Can only see more upside for this, and with the release of further good news, orders etc this will keep rising. Floated at 4p initially but only 200M shares in issue then, now nearly 600M in issue, but 4p easily achievable and more. Patience will be required though as always with these little gems, it won't be an overnight success. Quite a few posters on the LSE board have a good insight into the company and it's prospects, worth a look imo.
The heating product launch will catch the tail end of this year's cold season but I'm told that most heating system upgrades at done in the summer, so the launch is well timed.
Having lighting products that work with energy saving light bulbs will be a real win too. So many existing products only work with GLS or halogen bulbs. JSJS products that are 100% compatible with Megaman lamps will fill a vacuum.
In particular this " The detail of the contract will reduce the UK working capital to zero over the course of the next year, as all orders placed by Megaman UK will be paid for in cash in advance of shipment either from the UK or JSJS's Chinese partner factory."
Megaman then supply onwards to the others like Maplin, Amazon etc
They show that JSJS had slightly north of sweet FA cash at £733 (note there's no "k" or " '000 " missing there, they really had pretty close to no cash whatsoever. There was also £443k of debt.
It's almost a year later and we know that sales have been boosted by a rip-roaring amazing $800k, which in GBP terms is circa £490k. And yet sales were £476k in the first half and the company made a post-tax loss on those sales of £409k.
So the company is likely to have generated a loss in the second half and is desperately short of cash. Hence its brokers will be lining up for the regular pump 'n' dump placing that has clouded the history of this company every year since it was brought to market.
Ah yes, and all the good news is post year-end. Typical dodgy small cap. It would help if they did say something soon about the numbers, meanwhile the price can rise on speculation of what they will be. Buy on rumour, sell on fact, I heard once ...
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