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.

A bit of a drop this morning: QTI Bid: 0.375p Offer: 0.5p Change: -0.0625

618,000 traded.

I hope this is a pre-results tree-shake!

Qonnectis plc
28 March 2007


QONNECTIS PLC

INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2006


Qonnectis plc ('Qonnectis' or 'the Company'; stock code: QTI), a market leader
in multi-utility smart metering, announces its unaudited interim results for the
six months ended 31 December 2006, a period of continued progress.


Highlights:


Turnover increased by 141% to 161,185. (H1 2006: 66,983; FY 2006:
109,425);
Gross margin increased to 66% (H1 2006: 57%; FY 2006: 29%);
Significant new client wins, repeat orders continue to increase;
Strengthening key client relationships whilst founding new ones;
Production of units incorporating new technology;
Loss per share 0.23p (H1 2006: 0.25p; FY 2006: 0.51p)


Commenting on the results, Chairman, Richard Taylor said:


'The Company has continued to make progress. Once again turnover has increased
sharply, the gross margin has further improved, we continue to expand the client
base and increase the level of repeat business. The monies raised during the
period have been used to expand our marketing resources, primarily, and we are
beginning to see the benefits of this. In addition, we are excited by the pace
of development of our partnership with a major UK water company for the
production of units incorporating new technology for leakage control and
monitoring applications. The progress made in the period shows every sign of
being sustained in the second half of FY 2007.'

Bid: 0.5p Offer: 0.75p up 42.6%

Looks as if turnover for FY 2007 will be well in excess of 300k i.e. 3x FY 2006

Amazing though that one fifth of a penny represents a 42% rise !!!
I don't think I am going to get rich anytime soon with this one.

Look after the fifths of a penny and the pennies.....

588,082 shares traded so far - all buys at 0.7p

Glad to see the results are pointing in the right direction. The rate of growth is fantastic in itself - but really we need ten times the current t/o! The company's Achilles heel is the small amount of cash in the bank.

Nice to see the amount of shares traded this morning, but it's still barely more than 4,000-worth of stock.

There was no mention of the big pub deal, which I thought was supposed to lead to a big increase in turnover. Maybe the pubs are too busy with implementing the smoking ban . . .

Also no mention of a possible fundraising. Could be tactical: the board waiting until the SP rises a bit before announcing a placing at the higheer SP.

Continuing to hang on in there. PDYOR, etc.

The results were rather better than I expected although I agree there is still some way to go. According to my calculations they need to be turning over 1.5m-2m to break even but their sales seem to be gathering momentum so that may not take so long.
Any idea who the 'major water company' referred to in the RNS is?

From the interims:

The relationship with Scottish Water has gone from strength to strength and included an order to the value of 56,000 for 'iStaq' data loggers and web services.

With such big contracts, QTI should become profitable, when?

SM - I don't think the company referred to in connection with the new technology for leakage control is Scottish Water - the latter's smart meter service uses the standard data loggers. It's probably one of the following:
Anglian Water Services Ltd
Dwr Cymru Cyfyngedig (Welsh Water)
Northumbrian Water Ltd
Severn Trent Water Ltd
South West Water Ltd
Southern Water Services Ltd
Thames Water Utilities Ltd
United Utilities Water Plc
Wessex Water Services Ltd
Yorkshire Water Services Ltd

Could be Severn Trent, with whom the ceo of QTI has past associations but Thames Water has had a lot of bad publicity concerning leaks so it may well be them - QTI is based in the Thames Water area.

jma, if that is the case, then even better!

Kazik, they'll need a lot more of those "big contracts" to break the 2 million turnover that they apparently need in order to break even.

Up again today, 1.4 mil traded. QTI Bid: 0.625p Offer: 0.875p Change: 0.125

Which is about 11k worth!

All but two trades were buys so the upwards pressure on the sp has been maintained. So far there have not been any 0.5m+ trades since the interims came out.
Be interesting to see if tomorrow's IC has any comment.

Up again, Bid: 0.75p Offer: 1.00p Shares traded 883k

That's good to see.

Up again, a bit: QTI Bid: 0.75p Offer: 1.25p Change: 0.125 One million traded

Melissa Carroll for The Penny Sleuth (Part of Fleet St Publications) had a write up on QTI in her daily e-mail today, which may explain some of the trades today.

Some general industry info, might eventually provide encouragement for QTI:

Severn Trent unable to confirm whether it has met 2006/7 leakage targets UPDATE
(adds comment from chief executive)LONDON (AFX) - Utility Severn Trent PLC has pledged to meet leakage targetsfor the next financial year, despite being unable to confirm that it had metthis years targets in todays trading update.Chief executive Colin Matthews told reporters that it was too early to saywhether the company had missed guidelines on how much capacity it is allowed towaste."Leakage is a complicated measurement and it will take us several weeks toknow in detail the leakage for the year as a whole," he said. "So I can neithersay today whether we definitely will or will not meet our target for the year."But we have devoted much more resources than previously, and it is clearthat leakage in March is down on a year ago."Ofwats target for 06/07 is 525 megalitres per day. Last year, it was 505 andSevern Trent recorded 542 megalitres, but missed a fine from Ofwat because ithad undertaken to invest 100 mln stg over what had been asked to improveinfrastructure.Matthews was keen to point out that last year was the first time the companyhad missed its targets and added that the Ofwat objective was already slightlymore than the companys "economic level of leakage" - beyond which reducing leaksbecomes uneconomic and not in the best interests of charges consumers have topay."Our customers already enjoy some of the lowest charges for water and wasteanywhere in the UK," Matthews said. We will invest something like 550 mln stgworth of capital on maintaining our infrastructure and assets. For every onepound of profit, we invest 3 stg back into the physical infrastructure."But he will be privately hoping that Severn Trent does not miss targets forthe second year running. Ofwat's recent price review for utilities allowed thecompany to increase prices by 5.7 pct on 2007-08. Although this is notexcessive, it would be an inconvenient time for the company to admit it has notkept its side of the bargain.Matthews said Severn Trent was to cut 600 jobs over the next five years asit continued to refocus after the disposal of waste arm Biffa PLC.The job cuts, which amount to a 10 pct reduction in the workforce over thenext five years, will mostly be done by voluntary severance and are a responseto the utility becoming a pure water play.Analysts were heartened by indications that Severn Trent was "sorting itselfout", in the words of Merrill Lynch analyst Robert Miller-Bakewell.The company said trading was in line and forecast an increase in pretaxprofit of between 1 and 3 pct. "A shrinking regulatory backlog may yet encouragean LBO promoter to take a serious appraisal," he said.philip.waller@thomson.compaw/sljCOPYRIGHTCopyright AFX News Limited 2007. All rights reserved.The copying, republication or redistribution of AFX News Content, including byframing or similar means, is expressly prohibited without the prior writtenconsent of AFX News.AFX News and AFX Financial News Logo are registered trademarks of AFX NewsLimitedFor more information and to contact AFX: www.afxnews.com andwww.afxpress.com

A lot of money is being thrown at the leakage problem - could explain the comments in the QTI interims.

Here's more from Thames Water:

Tackling leakage remains our biggest priority.

Over the five years to 2010 we are investing 500,000 a day to reduce leakage, a total of 1bn that includes the deployment of the very latest technology to pinpoint invisible underground leaks.

Over 1400 people are already working to bring leakage down, a figure that will rise as Victorian mains replacement work in London accelerates.

We fixed 87,000 leaks in 2005/06. Thats over 200 a day, or one every six minutes, up 20 per cent compared to the previous year, a performance surpassing commitments we gave to Ofwat.


Leakage reduction and water conservation

We are visiting some business customers across our region over the coming months as part of our ongoing work to reduce leakage and conserve water.

We are connecting more equipment to water meters for a short period to collect extra data. This is separate to our regular visits to read meters for billing purposes.