Sarantel the antenna company on the rise for the first time this morning sincce the float. In for a small amount to see what transpires

we are due the trading statement any time soon now - tis getting close to mid-october almost.....

What's happened this morning??

..has to do with the anticipated losses getting bigger but being less than 5.6mill quid...

..so from interim to finals will be; turnover increase x 3, but loss increase to just over double...

would like to know if the costs will stabilise at all, and at what level.....so that can work out when profits will be reached (seeing that they are confident that turnover will keep increasing in 2006, at rates it has done so in 2005).......

Shows how savage the market can be!! Glad I only have a small amount invested but still v painful.

I spent a bit of time in SLG, although I've since sold, buy keep an eye on them. Think they still have a bright future..full order books, and as I've said before, make stuff that people want. Their delay in setting up vital machinery has affected profits/turnover. They've got lots of cash on the books.

Was the fall a bit overdone do you think?

Dear Mr Mole,

I bought in @ 73 in July and again @ 56 this week.

There has obviously been a bit of panic over the trading statement, and with costs rising quicker than turnover, it's no surprise imho.

Sarantel's antennas are the best satellite antennas out there and it won't take long before they are in most mobile devices offering these services. One reason for this is that they allow the receivers to be smaller.

Does anyone know how many GPS receivers are sold each year? How many sat radio receivers are sold each year? How many mobile phones are expected to be sold with GPS this year? Any figures appreciated.

Threats to Sarantel's growth:
- Someone bettering their design (unlikely and they have strong IP)
- Inabilty to manufacture enough antennas (they have invested heavily in new equipment but may need to open further manufacturing bases, probably in far east)
- Running out of cash (unlikely as 13m in bank and sales expected to rise considerably, equipment now acquired and running)
- Expensive patent infringement litigation (?)

I believe good news will be on the way soon. Looking cheap to me at the moment and a long-term winner. PDYOR.

Thanks for that Wee Jock..have dipped my toe in again as I think they are looking cheap at the moment also.

(when they listed) the directors did say it was going to be a rollercoaster ride for the next yr or so....i can see why....

...the costs are there for a massive increase in production, so it is now a matter of them increasing turnover on an exponential rate.....

it will be interesting to see whether they issue a favorable trading statement (seeing that they already have a third of 2005FY turnover ordered for 2006FY and are expecting to continue the same growth rates; ie - from 2004 to 2005 was 451% - which means they need to produce and sell about 4.5 million antennas in 2006FY),
and hopefully a comment on stabilised or reduced costs, when they announce the next preliminary full yr results on Nov30.

....am thinking bout getting some more now as well - to average down.......
this definitely is a medium-term prospect (12-18 mths) me thinks....until something else takes its place in terms of being technologically better...

Thanks b,

Do you have any idea of the potential size of their market? It seems that they may be moving into Satellite Radio, which is bigger in the US than here. Any idea of handset sales there? Also, if it is true that US mobiles will need GPS receivers by law, then Sarantel antennas will win a large share as they have antennas which are dual purpose, ie terrestial and satellite capable (concerns over bandwidth?). I would like to get a fix on how many antennas they may end up selling in a couple of years as I think it will be considerably more than 4.5m. Maybe the potential exists for 45m if they can make them...once they have solved any teething problems with their new kit, they should be able to roll out another factory or two at much cheaper costs and get them up and running in less time than the first. I don't know how many months or years in the future this is however, and my guess is they need to act fast to get ahead of any competition.

45m antennas is going to turnover at least 45 per year. Current market cap is ~25m!!!

(smart phones sales are approx 40m for 2005 and I expect more of them to incorporate GPS very soon. The Sarantel antenna is taylor-made)

This share could really fly. PDYOR

PS I disagree about your comment about medium-term prospect (12-18 mths), with respect. There is large potential here for the long-term, especially if Sarantel can crack the MIMO (Multiple In Multiple Out) market. I see sales increasing 5-fold y-o-y for 2-3 few years based on increased take up of GPS and Sat Radio.

2006 5m
2007 25m
2008 125m
then saturation?

Wee Jock,

I do agree with much of what you say.....

my comment in regards to the 12-18 mth prospect is simply that if they can get into profit (and a decent one at that) within the next 18 months or so (or at least by this time next year), then the sp will obviously be a lot higher to reflect it......i believe that by that stage they will have a good track-record of delivery of promises; which would then lead people to believe them even further if they were to forecast continuous massive foreseeable future growth rates.......all simply leading to further short-term sp rise.......
then as you mention above - saturation (??) may be lurking around the corner... So i suppose i can extend my timing thoughts to about 2.5 yrs from now, but at this stage have no idea whether anything else that is either better, or simply renders slg's technology to be obsolete, is about to hit the market......another even better antenna perhaps ??? or even less wireless pieces of hardware in a couple of yrs time, so less demand for the antennas; seeing that the entire communications medium ( of phone/internet/tv/radio) seems to be slowly merging....(in a few yrs time will we be internetting, making phone calls, listening to radio, AND watching TV from one device which is the size of a palmtop ??? - with a desktop sitting at home in every room, where you simply load in your palmtop into the docking station and then have a wider screen - perhaps as wide as the really cool plasma's) - you only have to read about what BSkyB is up to recently......

I got into SLG b/c i thought that they would have loads of antennas to sell to the Nth American market (for reasons that you mention above)........and because i realised in early 2004 that the wireless computer concept will be a big hit.........and then due to reading an article earlier in the year about how VOIP did not allow the tracking of position/location of caller in cases of emergency calls in Australia etcetc.......a problem that gps installed into the computer/laptop would solve.....which would be bascially very similar to the US problem with the mobile phones........
Although going from this, who is to say the the EU won't follow with similar laws for their mobiles and or wirless computers.....(would be good).....

But as you say, need to know how much of a market they really can get.....well we could work out how many mobiles there are, and also how many wireless laptops there are, and then we would need to see which other countries are likely to follow the US law requirement for gps receivers.....(I need to find out how they were going to resolve that problem in Australia)...but then need to find out what the existing competition is like from other antenna manufacturers.....and needless to say that we always have the as-yet-undeveloped stuff lurking on our blindside.....

Thanks b,

Very interesting stuff. I think this is going to be a rollercoaster ride. The product is good, but will it sell? Will they be superceded? Will they be ripped off? All good questions. I especially take your point re wireless consolidation. This is a risk, but is also an opportunity. The all in one devices will need multiple antennas, or one antenna to do bluetooth, 3G, Wi-Fi, GPS, GPRS, etc. It will take time but no doubt that is where we are heading. I guess Sarantel's long-term success lies in whether or not their antenna ends up in one of these systems.

I am hurting at my recent losses but am hanging in there. Good luck, and I will be interested to know any further thoughts you have.

WJ

The directors of Sarantel Group (AIM: SLG), National Milk Records (PLUS: NMRP) and ValiRx (AIM: VAL) will be presenting: Wednesday the 18th May 2011, Chesterfield Mayfair Hotel, 35 Charles Street, Mayfair, W1J 5EB (Charles Suite)

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