Smaller Companies: Fibernet could be a hi-tech hit
Sunday 29 March 1998
For those who took our advice and bought it may all have come as a bit of a shock: the shares had crawled up to almost touch 200p, before slipping all the way back and more to below their pounds 1 flotation price by December.
The reason for this change in fortune has been partly one of perception. While the company is behind the forecasts it made at the time of flotation, it has shown that there is growing interest in its main product, TANet. The underlying quality of the business, however, is little different from when it first came to market.
Fibernet builds and leases long-distance fibre-optic telecommunications networks for business. Last year, the company could boast sales of pounds 7.2m, mostly from local area networks. That will pale in comparison with the money it hopes to gain from TANet, a national network for data transmission. Several financial institutions have signed up for the service, which is much cheaper than using existing telecom links.
Stockbrokers Greig Middleton reckon sales will rise to pounds 13m this year - TANet's order book is around pounds 6m and rising - to produce pre-tax losses of pounds 45,000. But if sales hit pounds 21m in 1999, profits could hit a remarkable pounds 6m, which would mean an earnings multiple of 25 times. If that is expensive, it is still not overly so for a hi-tech business that could hit paydirt in a big way.
If the shares have caught up with their potential to some extent, there is almost certainly further upside - although investors should beware of hiccups along the way.
There may be some demanding cash-raising exercises ahead, although if the City likes the story, that should not dampen interest. A still somewhat speculative buy.
- 1 Apple has installed security backdoors on 600m iPhones and iPads, claims security researcher
- 2 Malaysia Airlines MH17 crash: Pro-Russian rebel 'admits to shooting down plane'
- 3 Louis van Gaal gets tough with Manchester United players, with Darren Fletcher and Luke Shaw berated in public and Phil Jones left looking bemused
- 4 Is Gideon Levy the most hated man in Israel or just the most heroic?
- 5 Peaches Geldof inquest: Tragic final moments of socialite's life reveal she lied to husband about failed heroin tests
Malaysia Airlines MH17 crash: Pro-Russian rebel 'admits to shooting down plane'
Israel-Gaza conflict: Deadly flechette shells 'used by Israeli military in Gaza Strip’
Malaysia Airlines MH17 crash: Blogger captures footage ‘showing BUK missile launcher that shot down jet’ now back in Russia
Peaches Geldof inquest: Tragic final moments of socialite's life reveal she lied to husband about failed heroin tests
Israel-Gaza conflict: The myth of Hamas’s human shields
Malaysia Airlines flight MH17 crash: 'Nine Britons, 23 Americans and 80 children' feared dead after Boeing passenger jet is 'shot down' near Ukraine-Russia border
Malaysia Airlines MH17 crash: Vladimir Putin is given 'one last chance' to end hostilities in Ukraine
The 'scroungers’ fight back: The welfare claimants battling to alter stereotypes
The truth about conspiracy theories is that some require considering
Malaysia Airlines MH17 crash: Ukrainian military jet was flying close to passenger plane before it was shot down, says Russian officer
Malaysia Airlines MH17 crash: victims’ bodies bundled in black bags and loaded onto trains
iJobs Money & Business
£300 - £350 per day + competitive: Orgtel: Cost Reporting Manager - MI Packs -...
£35000 - £40000 Per Annum plus 23 days holiday and pension scheme: Clearwater ...
£475 - £525 per day: Orgtel: Test Lead, London, Investment Banking, Technical ...
£380 - £480 per day: Orgtel: Business Analyst - Banking - Edinburgh - £380 - ...