FY19 set for >22% LFL growth & +ve EBIT
Sandal (19 employees) is a specialist developer & supplier of electronic products/solutions for smart home, IoT, energy saving and other applications.With only 42 days left until Thanksgiving and another 33 to Xmas, what is going to be this year’s ‘must-have’ stocking filler? The accolade is typically won by the latest ‘hot’ iPhone, electronic gadget or video game. However for 2018, my guess is it will be the ‘smart speaker’, either the Amazon Echo or Google Home. Why?
Well, accordingly to IDC worldwide sales of smart speakers will soar 168.1% in 2018 to $11.8bn (vs $4.4bn last year) and climb a further 23.9% pa on average over the next 4 years. In turn, creating a surge in demand for MiHome’s first class smart heating, lighting, power and other internet enabled devices.
Encouragingly, this morning the company said that for the y/e May’18 its installed base of gateways had jumped 144% to c.12.6k (5.2k LY). With the total number of connected devices similarly leaping 194% - equivalent to 4.33/system up from 3.67 LY. Driving revenues 71% higher to £1,015km (£593k) – and demonstrating once again that not only do consumers like what they buy, but they are also adding extra functionality into their mushrooming smart home networks.
It is worth noting that there are c. 23m households in the UK, of which we estimate only around 7% today are using smart lighting, heating, power &/or motion detector equipment. Assuming penetration rates rise to say 50% by 2025 - generating revenues of c.£250/system with MiHome securing a 5% share (vs 1% today) - then (in theory) this would represent a £143m opportunity.
We expect FY19 sales to rise >22% to £4,433k - pushing the group into the black (PBT £60k), whilst being only modestly cash flow negative, even after absorbing additional marketing/R&D investment. Elsewhere net debt is set to close FY19 at £1,236k, up £145k from May18 (£1,091k) – split £500k shareholder loan from Greenbrook Industries (24.7% stake), debt factoring and bank borrowings/overdraft.
Finally, in terms of the outlook we think that Sandal is on track to hit our projections, and hence maintain our 65p/share valuation: split 11.8p for PowerConnections, 57.0p MiHome, 2.2p Energenie and -6.0p net debt.
Alarm.com is a platform for the intelligently connected property. The company provides a suite of cloud-based solutions for smart residential and commercial properties. The company's service provider partners can deploy its interactive security, video monitoring, intelligent automation and energy management solutions as stand-alone offerings or as combined solutions to address the needs of a range of customers. The company's subscribers can connect to their property through the company's family of mobile apps, websites, and engagement platforms like voice control through Amazon Echo and Google Home, wearable devices like the Apple Watch and TV platforms such as Apple TV and Amazon Fire TV.
Arlo Technologies combines an intelligent cloud infrastructure and mobile app with a variety of smart connected devices. The company's cloud-based platform provides users with visibility, insight and a solution to help protect and connect in real-time with the people and things from any location with a Wi-Fi or a cellular connection. The company's smart connected devices include Arlo Security Camera, Arlo Q and Arlo Q Plus, Arlo Pro, Arlo Go, Arlo Baby, Arlo Pro 2, Arlo Audio Doorbell, Arlo Chime, Arlo Ultra, Arlo Pro 3 and Arlo Video Doorbell. The company's Arlo accessories include Arlo Charging Accessories, Arlo Mounts and Arlo Skins.
CyanConnode Holdings is a holding company. Co. designs and develops narrowband Radio Frequency (RF) mesh networks that enable Internet of Things communications. Co. provides customers with networking solutions and applications that help them in service delivery, business and energy. Co.'s optimized solutions provide narrowband RF network technology, delivering exceptional performance and total cost of ownership. These solutions include hardware, software and network management. Co.'s IPv6 solution is a wireless Neighborhood Area Network, an IP-based machine-to-machine platform that uses narrowband radio mesh networks to create deployments for the implementation of third party applications.
FireAngel Safety Technology Group sells and distributes home safety products and accessories in the U.K., Continental Europe and certain other countries and undertakes manufacturing activities in Canada. Co. is engaged in the sale of smoke and carbon monoxide detectors and accessories to end customers. Co.'s wholly owned subsidiary, Pace Sensors, is engaged in the manufacture and sale of carbon monoxide sensors to a third party carbon monoxide detector assembler based in China. Co.'s principal products are smoke alarms, carbon monoxide alarms and accessories. Co. has an extensive portfolio of patented intellectual property in Europe, the U.S. and other selected territories.
LightwaveRF is engaged in the design and development of devices and software to remotely control commercial and domestic lighting, heating, power and security. Co. provides a cloud platform and a range of retrofitted Co. designed and manufactured sockets, dimmers, relays, thermostats, heating, energy, sensing, monitoring and control devices. These devices are operated by conventional manual control, handheld remote, smartphone and tablet based apps. Co. systems can also be operated using Google Assistant and Amazon Alexa voice control, is Apple HomeKit compatible and provides users with dashboards to manage their smart home.
Scout Security is principally engaged in offering and managing home security products.
Smart Metering Systems installs, owns and manages utility assets and provides energy solutions. Co. operates in three division: Asset Installation; Asset Management; and Energy Management. Co.'s asset management division is a direct field force management and asset installation, which comprises regulated management of gas meters, electric meters and ADM™ units within the U.K. Co.'s asset installation division is engaged in investing in assets and providing remote reading solutions, which comprises installation of domestic and industrial and commercial gas meters and electricity meters throughout the U.K. Co.'s energy management division is engaged in providing energy-saving strategies.
Sonos designs, develops, manufactures and sells multi-room audio products. The Sonos home sound system provides customers with a listening activity created by the design of its speakers and components, a proprietary software platform and the ability to stream content from a variety of sources over the customer's wireless network or over Bluetooth. The company's products are sold via third-party retail stores, including custom installers of home audio systems. The company also sells via select e-commerce retailers and its website sonos.com. The company's products are distributed through its wholly owned subsidiaries: Sonos Europe B.V., Beijing Sonos Technology Co., Ltd., Sonos Japan GK and Sonos Australia Pty Ltd.
Synectics is a holding company. Through its subsidiaries, Co. is engaged in the design, integration, control and management of surveillance technology and networked security systems. Co. serves its customers through two business models: Systems, which markets under the Synectics brand, securing contracts for the design, development, and deployment of security and surveillance solutions founded on its Synergy 3 platform; Integration & Managed Services, which trades under the Quadrant Security Group and SSS Management Services brands, serving customers by designing security, surveillance, and facilities management solutions, and then implementing, maintaining, and supporting them over time.
Telit Communications is a global enabler of the Internet of Things (IoT). IoT is the technologies that allow both wireless and wired systems to communicate, exchange data with a range of devices, typically in a vast number of locations. Co. provides a portfolio of integrated products and services for end-to-end IoT deployments. This includes cellular communication modules, global navigation satellite system, short-to-long range wireless modules, low power Wi-Fi and Bluetooth, IoT connectivity and IoT platform services. Co. sells its products and services directly, and through a network of distributors, to direct and indirect customers, in countries around the world.
Vianet Group is a provider of actionable management information and business insight created through combining data from its smart Internet of Things solutions and external information sources. Co. operates two business divisions: Smart Zones, which principally consists of beer monitoring business (including the U.S.) and gaming machine management services; and Smart Machines, which comprises vending machine telemetry and contactless payment solutions, as well as monitoring business primarily in the vending sector. Co. provides design, product development, sale and rental of fluid monitoring equipment and machine monitoring equipment, data insights and related services in these divisions.
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