Here is my first CQ entry for 2012.21st Century Technology (C21)Company name.................21st Century Technology Company EPIC symbol..........C21 Normal Market Size (NMS).....10000 (but available in 25k) Market makers................fourSpread.......................13p to 13.25p (very tight!) Buy price (p)................13.2 Target price(p)..............15.85Stop trigger(p)..............10.55 Market Capitalisation (£m)...12.1m (92,464,755 shares in issue)Company website..............http://www.21stplc.com/Additional multi language....http://www.21stcenturycctv.com/index.php This is a company that I have been invested in for over three years now. It has changed its name twice in the recent past but they seem to be happy with this one now and as I have attended their AGM in Mitcham three times I think the directors know me by now too.The key change at 21st Century was the new large shareholder that came on board about three years ago and pushed for a change in the board composition. The new chairman is very good and will drive shareholder value and promised that a dividend would be paid to shareholders this year before any more bonuses would be paid to any directors...that was certainly music to the ears of the long term holders over the last ten years or so who have not had a good return on their investment at all.This page should help investors see the key information for C21...http://www.21stplc.com/investor-relations.phpThe business21st Century is the preferred supplier of on-board CCTV systems for Arriva UK Bus and the Go-Ahead Group and an approved supplier to First Group Bus. The Company has pioneered the use of Wi-Fi with on-board CCTV systems and Transport for London commissioned the Company to undertake a trial of ‘LiveView’ – a system which transmits live CCTV pictures from on board the bus to a public transport and police control centre. 21st Century was also the first company to successfully launch Automatic Video Downloads and a bus CCTV monitoring system (HeartbeatTM) which allow the CCTV manager to remotely download CCTV footage from the bus to his computer and check that all the CCTV systems fitted to his buses are fully operational, without leaving his desk. The Company’s overhead camera passenger counting device, known as PAS – Passenger Analysis System, links to the ticket machine and enables bus operators to analyse specific bus route ticket sales and passenger numbers.21st Century’s EcoManager product has made a significant contribution to sales since its launch in July 2008. The EcoManager black-box system is aimed at reducing fuel and maintenance costs, reducing emissions and improving safety for bus operators by monitoring individual driving styles against fuel consumption. Following a successful trial Arriva UK committed to install the device on all their new buses and to retrofit a large proportion of their existing fleet. In 2009 Arriva North West and Merseytravel won the industry recognised Alexander Dennis Award for Innovation following their installation of the EcoManager system which yielded fuel savings of up to 12% and associated CO2 emission reductions. This was followed in 2010 with a driver safety award for EcoManager presented by the road safety charity, Brake.I invested in early 2009 after the launch of EcoManager but both parts of the business are going well. Here is the latest trading update....http://www.investegate.co.uk/Article.aspx?id=201112130700208...Profit after tax for the year to 31 December 2011 from continuing activities, is expected to be in line with market expectations and cash flow generated from operations significantly ahead of expectations in the second half of the year. The Company now has no bank debt and held cash at bank of £2.7m at 30 November 2011 compared to net debt of £0.6m at 30 June 2011. So good so far...The reason for a 20% gain in 90 days.The company is doing well in its markets and growing significantly overseas. In that trading update they stated..The Company has recently appointed its first distributor in mainland Europe and is currently trialling the EcoManager system with several potential new customers in its home market and abroad.At the last Agm I asked the board about the cost of trials and that if the bus companies save so much money why the trials would not be successful and result in orders ? In other words what prevents a significant order following on from a trial ? I was told that it is important to get to the point of trialling the system and for the bus companies to understand its potential and for drivers to accept it. They said that so far ALL trials had resulted in orders.I therefore like the noise about a mainland Europe distributor and lots of current trials in home markets and abroad. Orders should come in 2012 but how soon one can only guess and hope!?Secondly the cash has been flowing in. Cashflow has been very good and ahead of expectation with C21 holding cash at the bank of £2.7m at 30 November 2011 compared to net debt of £0.6m at 30 June 2011 but then it got even better last month...http://www.investegate.co.uk/Article.aspx?id=201112280700226...21st Century, the supplier and installation service provider of public transport CCTV and vehicle monitoring systems, today announces that it has exchanged contracts for the sale of its freehold head office premises in Drake Road, Mitcham, Surrey to Byrne Group plc ("the Purchasers") for cash consideration of £2,350,000. The Purchasers have paid a deposit of £235,000 and the balance will be payable on the agreed completion date of 6 January 2012. The property, which is mortgage free, was disclosed in the Company's last unaudited interim accounts released on 19 July 2011 at a carrying value of £2,592,000. So effectively the company now has around £5 million in cash sitting in the bank. The market cap is barely double that and you will remember the chairman mentioned a dividend to shareholders at the Agm well,it could get even better..The Board will also give consideration to the payment of a special dividend once the Company's full year results to 31 December 2011 are finalised and if the Board believes at that time that the payment of a dividend would be in the best interests of the Company.Those results are released on the 28th March and well within my three month target for 20%. What is more the Agm will be in April or early May and there should be more news then too. In SummaryForecast growth2010 eps 0.67p (actual)2011 eps 1.00p2012 eps 1.50pTrading update....Very good and lots of potential new businessDividend...Not yet but it is coming and may be a BIG Brucie bonus !Long term prospects beyond CQ....Looks very bright and if they meet the 2012 forecast then it could trade at 20p and still look very good value but I think shareholders will have had a large cash return before then to make it look even cheaper !Special attention.... Note the shareholder register (Over 3%)Peter Gyllenhammar (Featured in the book 'Free Capital' by Guy Thomas)27,243,344 (29.54%)Slater Investments/Northglen Aggressive SPC (Mark is without doubt one of the shrewdest small cap investors in the UK)14,129,848 (15.32%)V V Shah3,300,000 (3.58%)I hold and have held for three years but very recently added on the price weakness that has contrasted the positive updates. That is nearly 50% of the shareholding taken care of by these serious small cap investors.Downside risk...Hopefully not too much with such an exceptionally low enterprise value and cash backing should underpin even gentle growth rather than the 50% growth that is forecast for 2012. I wholeheartedly recommend this CQ to the houseDavid
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