Lo-Q CEO: Lots more to come as smartphone push steps upWednesday, February 13th, 2013
The company stepped it up last year with profits and revenues rising sharply, but Burnet believes the Lo-Q story has only just begun.
The key aim for the year ahead is to keep improving the existing business, but also to build on the early success of Q-smart, its smartphone solution, which Burnet describes as a “colossal opportunity” for the company.
The company sealed its first smartphone deal with French operator Compagnie des Alpes in October that will see the queuing specialist’s Q-smart software launched at its Walabi Holland theme park, one of the biggest in the Netherlands.
Burnet believes there will be many more deals on the cards this year for Q-Smart, which allows park visitors to plan their day beforehand on their handsets, skipping queues by booking tickets and times for rides in advance.
He wants to replicate the efforts of recently acquired US ticketing group accesso, which saw over 1.1mln people download its mobile app last year.
“The world is moving to a smartphone world. Within a year or two, 4G is going to be pervasive. Getting data that quickly means a huge amount in our world,” said Burnet.
The company struck a partnership in September with Sanderson Group, a top Australian multi-national theme park attraction designer and manufacturer, in its bid to crack the lucrative Asian market.
Lo-Q will be looking to reap the rewards of Asia’s untapped potential in 2013. Notably, talks so far have only involved launching its smartphone solution rather than its flagship Q-Bot system.
Burnet also suggests there will be more news this year on intellectual property (IP) as it fends off any competition from its rivals, as well as more “sensible, earnings-accretive acquisitions” in the same vein as that of accesso.
“I’m trying to build the largest technology supplier to the leisure and entertainment business and where we find companies that help us down that path, we’re going to go see if we can do sensible things with them,” said Burnet.
“We’ve bought a fantastic American business and the next one might be American, it might be Korean – we’re not limited by size or geography.”
Broker Canaccord Genuity believes the company is positioned to see “strong profit growth” in 2013 based on the large number of new sites it began operating at last year.
Analyst Bob Liao, who raised his target price to 500p from 440p, expects to see accesso adding to profit growth this year.
“With more normal weather patterns this year, we believe Lo-Q’s growth from its original customer base could accelerate,” he added.
Profit before tax in the year to November 4 was £3.2mln, up 16.7% from £2.7mln the year before, on revenue that rose 18.7% to £29.1mln.
The group ended the financial year with net cash of £8.9mln, up 18.9% from £7.5mln a year earlier.
Lo-Q also revealed that it has agreed a new banking facility with Lloyds Bank Commercial Banking.
The £4.75mln (US$7.5mln) debt facility will refinance the £4mln convertible loan note issued as part of the recent acquisition of accesso, as well as accelerate its growth ambitions into emerging markets.