Tiny Qonnectis is at present in an embryonic stage, but seems to have an interesting product with great potential. Their flagship product connects energy and water meters to the Internet via Qonnectis' own server and users' website, providing 24-hour real-time accessibility as well as the opportunity for instant data comparison and updates as frequently as every 15 minutes. This avoids the costs of traditional meter-reading methods (i.e. reading by eye or the more recent "drive-by" technology). The new technology has already saved one early customer a reported 180,000 after it spotted a water leak and alerted the user. Early adopters include utilities such as Scottish Water and Generale des Eaux Lyon, plus public sector clients such as the NHS, the RAF and various District Councils (the list is numerous, so please see QTI's press releases for the whole picture). In November 2005 QTI announced a distribution deal with Compteurs Farnier of France, providing potential access to the USA and Canada in addition to the French market.

The business case for QTI seems strong: the product is inexpensive and provides cost savings both in terms of labour-saving and of cutting wastage. Sales include an element of subscription on a five-year basis; it seems logical that satisfied customers will both increase their number of meters in use and come back for further subscriptions after the five-year period has elapsed. The potential market is huge. The real question is, when will QTI achieve break-even?

CEO Mike Tapia previously built up the Talisman remote/drive-by meter-reading business, which was then sold to Severn Trent Water Co around 1997.

Does anyone have any figures on the Talisman sale, or perhaps on Compteurs Farnier? It would be good to get some idea of the current market.


EDIT: New charts added, 21Dec2007.

Squidd, it was you that depressed the price and you're a very naughty boy :o)

Welcome aboard anyway, and hope you managed to get the stock at the price you were after.

My limit buy order @ 0.9p was not filled on Friday, so I'm not yet a holder of QTI. With this huge spread it seems the mm's don't want to trade and it's not clear whether we are seeing the bottom or just a new low: I don't find the chart very helpful on this point and the owls who waken me at this time of the morning don't seem to know either.
Google has thown up a lot of stuff about "remote meter readings" which I've been browsing, though so far without any direction. I'll add some views when I've digested more.
sd.

Final on SCAM. Firm is Jacobs and Burns, prime pusher, Marcus James. Having initially been rather persistent, with all sorts of legalistic jargon to convince me of their integrity, as soon as I started asking a few awkward questions, they went away in hurry!! They are now getting plenty of adverse publicity.

Meantime, nice to see a newcomer or two recognizing the latent potential of this company which some of us saw at ten times the sp!!!

5th February 2007

Qonnectis plc

Partnership with Major UK Water Company

Qonnectis plc, a market leader in multi-utility smart metering, announces that,
following successful field trials of pre-production units, it has received
initial orders for a new product from a major UK water utility to a value of
73,000.

The orders are for the production of units incorporating new technology for
leakage control and monitoring applications. They follow the successful delivery
of that announced on 11 October 2006, stating that Qonnectis had received a
52,000 order to develop an innovative product with a utility.

The formal industry launch of the product is expected to take place later in
Qonnectis' financial year to 30 June 2007, with volume production taking place
in the Far East. The intellectual property rights (IPR) for the co-developed
product are jointly owned, and are based on a combination of pre-existing
background IPR owned independently by the water company and Qonnectis.

Michael Tapia, Chief Executive of Qonnectis commented;

'This product represents a breakthrough for leakage control and a major step
forward for Qonnectis as a business. The partnership with our customer has
created a product with considerable potential and we expect it to make a
significant contribution to our continued growth.'

nice post, JMAC. It's all pointing in the right direction, as ever.

Don't mean to pour cold water on this but 73k is a very small order & that is the value, not the profit. I suspect on the initial order that the profit margin is very small. The sp has not moved, indicating that the market is not over impressed either.

Good point, Harry, but for those of us playing a long game with QTI the green shoots are vey encouraging.

Agree ST. Also, if the 73k is included in the turnover to June - which was already expected be at least 250k - it will provide an useful extra boost. A clearer picture should emerge when they publish the interims in March.

JMAC, yep, it'll look good on the topline, but we do need to have significant revenues in sight. I have no doubt that these will be reached in due course, but then you know I have long been bullish about this stock :o)

Agree that the interims will be telling - and hoping that the pubs industry order resurfaces at some point as that is likely to be a major driver of revenues.

It's good to see that QTI is expanding its product range and still continuing to attract the attention of large industry customers.

As long as the company doesn't stay cash negative for too long (and I'm guessing that unless there is a huge shift in revenues, they will still be burning cash at the end of the period to June 2007), things should be good for us. I'm anticipating another fundraising though.

I suggested QTI to our investment club as a recovery stock but had an instant rejection owing to the disastrous chart, the huge spread and lack of any signs of life.
There's a crying need to solve the hassle with meter readings and its surprising that there's been so little penetration in the mass market. It appears that remote reading for electric meters has been around for at least 20 years, using the existing power cables and/or a wireless link, and before the internet became widespread, yet even this seems to have gained only a toe hold both here and in the US. I assume that with deregulation, the installation and set-up costs have proved to be a barrier, and you only have to look at the treatment that outside meters are subjected to, by vandals etc, to realise that the solution has to be both simple and sturdy as well as cost effective. So the news of mass production in the far east is encouraging and QTI stays on the watch list.
sd.

SD, thank goodness someone else is awake - or don't tell me, actually you live in Malaysia and are posting here during your lunch-break!!

I'm not surprised your investment club colleagues didn't go for it, to be honest - if I wasn't locked in I probably wouldn't buy right now either.

However, I still remain bullish for the long term. QTI will get there in the end, and they have certainly proved they can save users money, so to my mind the casefor the product ought to be well-proven already.

Soul out.

SD - 30m bi-directional electricity meters were installed in Italy before deregulation - there was an article about this in the 15th December Economist.
Ofgem is currently studying the introduction of smart gas/electricity meters here.

Tonight (Thurs 8 Feb 07) Radio 4:

20:30
In Business
Water Works
The geopolitics of oil has loomed over global affairs for the past 80 years, but now the attention of policy makers and investors is turning to an even more basic resource. In an ever thirstier world, Peter Day asks if water will be the next oil?

ST: No, I'm not in the far East, but in the near South, not far from where you are heading. I too am optimistic about the prospects for QTI in the longer term.
JC & SM: Thanks for recent posts, I think the news supports this longer term view.
Purely from a charting point of view, I like my recovery stocks to spend some time in the doldrums, long enough for the sp to easily cross and lead the 65 & 125 dma's. as has happened with CW & PDR from opposite ends of the spectrum in my recovery portfolio (although other stocks I have, aren't so accommodating). Any whiff of a possible cash call for QTI will probably ensure the sp stays depressed for a while yet and maybe I'll be piling in when reconstructing my portfolio in the new fiscal year.
sd.

They may well get there in the end, Soul but I am beginning to suspect the next ice age might come first. Then we will be frozen in as well as locked in!
(Over on ADVFN, the QTI thread has taken to discussing dog racing to pass the time!!)

Never mind, Dave, I seem to be blessed with incredible amounts of patience where Qonnectis is concerned, and sometimes wish I wasn't :o)

At the present time a new ice age seems distinctly unlikely...The March interims should provide something positive - hopefully an indication that the revenue for the current financial year will top 300k.
My main concern is that their product will be displaced by companies like Severn Trent with greater development resources. See:
SmartMeter(TM) Water Meters Receive Measuring Instruments Directive Approval for EuropeSource: www.edie.net

Still watching QTI, but can't find much that's positive: my trawl thro' all the info' that Google produced, raised more questions than answers. Meanwhile, I've had a nibble at SPI which among other things does meter readings.
sd.

Take your point jmac, but the article concerns the development of meters which retain long term accuracy. Seems to me that QTI's technology to monitor these is then even more relevant. What are we missing here? Why is this company not heading for the stars? If they don't grasp the nettle soon then your concerns will become only too evident... somebody will steal the advantage with a vengence.
rgds.

M Tapia, ceo of QTI, founded Talisman Systems which was acquired by Severn Trent in 1997. But Severn Trent are now introducing meters with sophisticated data logging and inbuilt transmitters - probably short range at present but I wouldn't think it would be difficult to extend this using mobile phone technology etc. This is from Severn Trent's www.smartmeter.co.uk website:

Severn Trent Metering Services Introduces Revolutionary Water Meter with Internal Radio Transmitter
Date: 30/06/2006


Chesterfield, UK June 29th, 2006 Severn Trent Services has introduced the latest addition to its SmartMeter family of fluidic oscillation water meters. The SmartMeter C100R concentric water meter features a range of functions designed to provide real-time monitoring and reporting of domestic water consumption data, identification of peak week demand and the detection of leakages. The C100R helps address concerns about water shortages by improving management and reducing demand of water resources.

Severn Trent Metering Services recognised the need for a new approach to tackle the issue of water resource management. After discussing with seven UK water companies the need for an improved meter, a working group was set up to establish a detailed technical specification and to complete the final design. The development of this revolutionary new water meter took 21 months from conception to launch.

Utilising an internal radio that transmits real-time data, the C100R constantly monitors consumption patterns and stores information on continuous flow, which may indicate leakage on customers' properties. The transmitter produces data every 30 seconds, providing users with the ability to carry out high resolution wireless data logging. The real-time data information enables daily, hourly or more frequent data logging, offering water utilities the ability to perform consumption profiling and to implement time-of-day and seasonal tariffs, encouraging consumers to use water during non-peak demand times.

The C100R is configured with a real-time clock and calendar and is programmed to store meter readings for the previous 14 months to provide accurate billing data and minimise customer disputes. It also is capable of recording the start date, duration and rate of water leakages, enabling water utilities to identify and prioritise where work is required and when the repairs have been successfully completed.