They have now signed Heads of Terms with 7digital, outlining the detailed material terms of the potential acquisition of 7digital by UBC. A period of exclusivity exists up to 4 April. Whilst UBC's shares remain suspended until the end of May or the deal falls through, shareholders should at least receive more detail on the acquisition in two or three weeks time. The aim of the merger is to create a new public company via 7digital which will be perfectly placed to exploit the rapidly developing market for online and mobile music services.
Potentially, the new entity could be very exciting, particularly if 7digital can maintain or even improve upon it's current growth rate. 7digital have grown revenues 289% over the past five years:-
http://about.7digital.com/news/7digital-ranked-deloitte-technology-fast-500-emea-2013
In the same announcement UBC revealed that Audioboo is also to list on Aim via a reverse takeover of One Delta. UBC shareholders will retain a 20% holding in the company should the reversal successfully go ahead. Audioboo currently boasts 2.3m registered users, up from 600,000 less than 18 months ago.
It will be interesting to see the market reaction to Audioboo's listing where its initial market cap. will be modest in the extreme when compared to the multi-billion dollar listings of the big name social media sites such as Twitter and Facebook.
Also of interest will be whether Audioboo or 7digital lists first (assuming either go ahead as planned)? Of course if it's Audioboo and they receive a positive response, it will have a material impact on sentiment when 7digital lists.
As a shareholder in UBC Media, I am hoping for a positive response to the developments and remain cautiously optimistic. I await further details.
Trakm8 released news of a further contract win this week from a leading UK wireless security and safety provider with a significant hardware order to manufacture remote wireless
fire monitoring products. The contract is a £680,000 hardware order for remote wireless fire monitoring units with all of the revenues expected in their next financial year commencing 1 April 2014. This hardware order is part of a recently signed supply agreement that is expected to lead to revenues in excess of GBP1m per annum.
This RNSNON may have been missed by many investors, and the company probably still lies well below the radar of many investors.
Significantly, John Watkins, Executive Chairman of Trakm8 commented:
"The scale of this order also underpins our financial expectations for the coming year."
I have high hopes for the future of this excellent little company that is still only valued at around £16.5m.
Finally, Synety released their full year results on Friday which show remarkable growth, albeit from a low base. Whilst this is a highly speculative investment, the signs at this early stage look very encouraging, not least their constant referral to accelerating growth, and 'pushing on an open door' when referring to sales. This confidence has now been backed up by the company promising to provide quarterly updates regarding their KPIs (Key performance indicators). The next one due in less than three weeks time.
Particularly exciting is their entry into the US market where they already have a number of customers using CloudCall. They appear to be 'pushing at an open door' here as well, and I certainly don't recall having invested in any UK company before where US customers are pulling them into their territory.
Early days still with Synety, but potentially very exciting.
At the same time that Synety announced their final results, they also announced a fund raising for £5m through a placing and open offer. The placing and offer is at £2.50 per share which may have appeared a steep discount to the prevailing share price on Thursday evening. However, perspective is everything, and since you could buy the shares at £1.50 or less in the open market less than five months ago (as I did) then to be able to place shares to institutions at a 67% premium to this price in such a short space of time gives you some idea of the rapid progress and confidence they are building. Quite frankly if any company I hold shares in needs to raise capital at a double digit premium to the price I paid just a few short months ago then I'll be quite happy. Of course I always prefer companies to grow without the recourse to capital raisings and the subsequent dilution, but in cases such as Synety's it's a necessary evil. Besides, whilst the share price initially dipped in response to the fund raising, by the end of the day the bid price was back to where it started as investors concentrated on the more important growth figures and outlook statements that had been reported.
I shall continue to hold my shares in this company, and share the Directors confidence in the future.
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