AIMprospector continued investor interest. Jarden Corporation (an American multinational with a market cap of £4.9bn) is the largest shareholder in Sprue Aegis and supplier of the BRK appliances marketed and sold by Sprue Aegis. After failing with a takeover attempt pitched at 90p in 2013, Jarden is now free to bid again for the whole company. At some point in the future and at the appropriate price, I expect that Jarden will succeed in acquiring Sprue Aegis and incorporate Sprue products into its own vast offering of global consumer appliance brands.
Trakm8 is an automotive telematics business, established in 2002 and listed on AIM in 2005. The company has grown fast in recent years, through both acquisition (four acquisitions since 2006 with the latest, BOX Telematics in 2013) and organic growth. Revenues, which were flat in the previous 4 years, more than doubled in FY2013/14 following the BOX purchase. The company has been profitable since 2010 but earnings doubled in FY2013/14 on consolidation of BOX. During their presentation at AIM Investor Focus, management confirmed the growing strength of recurring revenues and the transformational impact of the BOX acquisition. The market is forecasting a further surge in revenue and earnings growth for FY2014/15 and beyond. Recently, Trakm8 has successfully added bluewww.aimprospector.co.uk
Market Cap
Price
P/E (forecast)
Yield (forecast)
Cohort (LON:CHRT)
£99m
235p:243p
14
2%
SCISYS (LON:SSY)
£27m
90p:94p
9.7
1.7%
Sprue Aegis (LON:SPRP)
£130m
280p:295p
17.1
2.8%
Trakm8 (LON:TRAK)
£21m
70p:75p
12.7
0
Ideagen (LON:IDEA)
£42m
33.5p:34p
16.9
0.5%
Company
chip customers such as Direct Line Insurance, the largest motor insurer in the UK. No dividend payments are expected in the medium term but the company could surprise given its strong cash position. As Trakm8 expands the number and range of its installed telematic devices, it is effectively building an intelligence-based service derived from data aggregation. The Executive Chairman, John Watkins, has previous experience in monetising an information database, having successfully sold Omitec, the UK’s biggest vehicle diagnostics company, to the German automotive giant Continental in 2012.
Formerly known as Datum International, Ideagen (listed on AIM since 2012) is an information management software company specialising in GRC (i.e. ‘governance, risk and compliance’) for major enterprises and clinical content for UK NHS Trusts. The company has demonstrated adroit integration capability having acquired six companies over the last four years, resulting in revenues growing
ninefold to £9m. Earnings trends have been affected by amortisation of sizeable acquisition intangibles during the same period meaning that dividends did not start until 2014. Management is confident in its outlook for FY2014/15 with continuing growth in recurring revenues and a further increase in earnings forecast. The June 2014 acquisition of EIBS, a software company with 40 major clients in the NHS and other public sector bodies is expected to be earnings enhancing in FY2015/16. Ideagen will likely have £4m in net cash at year end FY2014/15, unless another acquisition is made. The potential for growth in the NHS is enormous because over 50% of Health Trusts do not have appropriate software for either EDM (i.e. ‘electronic document management’) or OCM (i.e. ‘online case management’). Ideagen provides both of these solutions. Moreover, the flexible and modular ‘portal configuration’ of Ideagen’s GRC software, already embedded in many blue-chip multi-national companies, should continue to be an attractive offering to many more large and especially international enterprises. If you have not previously attended AIM Investor Focus but would be interested in participating at a future event, register your interest with Blackthorn Focus. 11