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.

One final thought - if there is a rival out there, it could be that the smart thing to do is to buy their shares too. If anyone hears anything, please post it here!

I TAKE IT BACK !!!!!! I have no way yet of knowing for certain whether QTI is responsible for the 3,000 unit trial, but they mention the term "smart metering" of gas and water usage.

See the webpage: http://www.qonnectis.com/Solutions/Energy-Water-Usage/Default.aspx

However, QTI has never, as far as I know, mentioned having a working relationship with EDF, the partner in the trial announced today. Can't see anything about the trial on the EDF website's Media/News page either.

I have sent out a mail to try and get some clarification - will post as soon as I can.

Another news article, dated 24 April, exists on the National Energy Action website. It doesn't disclose the identity of a manufacturer, though, unless EDF Energy is it!

http://www.nea.org.uk/News_releases/?article_id=267

The trial is mentioned in today's Daily Mail too, but again no company identified. (Obviously same brief as Telegraph).
I too have e-mailed Qonnectis shareholder info line for clarification. Telegraph and Mail next stop!

Some useful backgound on smart metering on:
http://www.est.org.uk/partnership/energy/lead/index.cfm?mode=view&news_id=496
Includes the following:
'Providing smart metering to consumers is a bigger task than just replacing around 40 million meters on the wall, and there will be significant cost implications. Gas and electricity meters have traditionally been paid for by suppliers, and the cost tends to be passed onto the consumers through their fuel bills. Deciding if the extra cost of providing smart meters is worth it depends on who will bear the costs, how the stakeholders value their benefits and whether they will be realised.

Different technologies offering different services from different manufacturers are already available. In general, however, energy suppliers do not want the technology prescribed to them but want freedom to implement the most cost effective solution. At the same time, privatisation and the freedom to switch between suppliers means it is important there is compatibility between meters and suppliers.

It is highly unlikely customers will voluntarily install meters, so current policy is based upon the suppliers paying the upfront costs which are eventually passed on in fuel bills. But because the energy supply market has been set up to facilitate switching and there is no distinction between quality of supply, competition has forced prices and margins down. As a result, suppliers cannot afford to invest in more expensive technology because customers are likely to simply switch to a cheaper supplier when asked to bear the additional costs. Customers could even switch to the supplier providing the best meter and switch back to a cheaper supplier under the 28 day rule. All of this has made suppliers wary of investing in smart meter technology.'

More on:
http://www.energywatch.org.uk/uploads/Smart_meters.pdf

News on the project we discussed: NEA confirms that the manufacturer of the meters involved is a company called Pri. Never heard of it, but may do some digging when I get the opportunity. Any other views are welcome.

EDIT: Pri is online at www.pri.co.uk

They do not appear to be listed as there is no link for their financials.

Thanks for that soul, well done. Question remains, of course... could be that Pri are using QTI technology? I have had no response from QTI to my enquiry re this issue. Will post if I receive.
rgds.

Have scoured the PRI website. For what is apparently an entirely private company, it's pretty damn impressive. It seems to offer much of what Qonnectis seeks to offer but with the capability of providing the hardware to go with it... Internationally! Cannot find any reference to any link between the two.

If one absorbed the other we might indeed see some excitement! All IMHO of course.

And here's another one to consider! With acknowledgements to Knowing on ADVFN.

http://www.ampymetering.com/int/frame_blank.htm?electrical.htm~mainFrame

Had a reply, in confidence, from Mike Tapia. While confirming that the company that the company is selling to and/or in discussions with Utility Companies he did not mention any involvement with PRI. He assured me that announcements on customer base would be made when appropriate.

More promising news as the company grows its' customer base in these times of water shortages and the drive to prevent water leakage. I wonder if Thames Water have heard of Qonnectis! :-)


Qonnectis plc
25 May 2006



FINAL 25 May 2006



Qonnectis plc


UK brewing and pub industries adopt Qonnectis' water efficiency technology


Qonnectis plc ('Qonnectis' or 'the Company'), the energy and water conservation
IT services provider, has won orders and begun deliveries to a number of
customers in the UK brewing and pub industries.


As part of an OEM agreement with a UK water management consultancy, Qonnectis'
water meter reading and water management services are being deployed via a
number of UK pub operators. The main applications are in water conservation and
cost savings in the operation of pub washrooms where the technology will
identify leaks and running taps, and allow the companies to benchmark water
usage. Qonnectis' partner initially is targeting up to 2,000 installations over
the next three years operated by their existing pub chain customers, and up to
12,000 sites overall. There are approximately 60,000 public houses in the UK in
total.*


Qonnectis' equipment has also been deployed by a number of brewers and
distillers in conjunction with the Company's water utility partners. The brewing
industry's high consumption of water and energy means that it welcomes the
opportunity to significantly reduce its costs by improving operational
efficiency. Using Qonnectis' products and services to monitor utility
consumption real-time is a key first step in this process. There are over 600
breweries and distilleries in the UK.


Michael Tapia, Chief Executive, commented:


'UK brewers and pub operators are major consumers of water. Indeed, the recent
extension to UK opening hours has led to a substantial increase in water usage.


'It is extremely gratifying to see the industry beginning to adopt our
technology and services to contain its utility costs and we look forward to
working closely with our partners to increase our penetration of this market.'


For further information, please contact:

Qonnectis plc
Michael Tapia, Chief Executive 020 8893 4766

Bankside Consultants
Michael Padley/Daniela Hale 020 7367 8888


* Source: British Beer & Pub Association


Editors' notes - About Qonnectis

Qonnectis' patented technologies enable the analysis of remote meter data to
facilitate water leakage control, customer profiling, and energy and water
management efficiency. Its products are already being used by a wide range of UK
and overseas utilities including Scottish Water, Cambridge Water, Aquavitae,
Generale des Eaux and Lyonnaise des Eaux as well as large commercial and
domestic users of energy or water.

The iStaq family of products work by sending meter readings to Qonnectis' secure
data centre via SMS text messaging over the GSM network. The data is then
aggregated and published online via utility-branded 'myMeter' websites operated
by Qonnectis. The data can also be sent directly to utilities' billing systems.
Customers can access real-time information via a web browser using the 'myMeter'
service. For more information, please visit
www.qonnectis.com

Marvellous, marvellous, marvellous news!!

2,000 installations ought to be worth at least 2 million in revenues to QTI, allowing for partner commissions, etc. Clearly this represents a major increase in turnover, albeit spread over the next three years.

12,000 sites overall is fantastic - hopefully repeat business every five years will ensure a strong and loyal customer base.

One thought:

QTI is clearly well on the road to break-even. They could even achieve this on a turnover of 2 million (WDIK, PDYOR!).

I'd be expecting them still to show some kind of loss on the second half of this year, and therefore for the full year, possibly achieving break-even in the next financial year (ending June 2007).

The current cash position seems to be a bit slim and may not be enough to cover QTI through to profitability. Therefore my question: how much more cash are they likely to need and over what period of time. Is a placing in the offing?

I would not be surprised if they decided to raise around 500k - 1 mil, possibly before summer ends.

Any views?

Looking cheap today. I haven't checked by performing a dummy trade, but the offer price is down a smidge:

QTI Bid: 1.5p Offer: 1.875p Change: -0.0625

Soul, your post 39 says it all. Breakeven is on the horizon... but they could go bust before getting there. Given QTI's slow progress, (and even allowing for their apparent timidity and admirable reluctance to fritter away cash) I cannot see how they can get through to autumn without raising some more cash. Given the sp movement following the relatively upbeat rns in May, they may just have a problem finding further backing unless some "business angel" with vision thinks he may have stumbled onto a bargain!

diydave, suggest you contact Michael Tapia (e-mail/phone) and ask him the question about their cash position. He's very approachable. :-)

Dave, I'm inclined to be a little more optimistic regarding QTI's chances of raising funds. Most tiddlers go through a spell of fundraising - with some it lasts for years (I invite the court to consider Osmetech and Scotty as prime examples of this phenomenon). I'm not at all worried about QTI's prospects on this score - certainly if I was sufficiently solvent I'd back them myself in the event of a share placing.

I second Silvermede's thought re Mike Tapia - I have exchanged mails with him from time to time myself. However, he will not disclose price-sensitive info, as befits any director.

I'm also wondering if we'll be lucky enough to get a trading update any time soon. Would be nice to have a little newsflow.

I agree with you about the cash situation - it's unlikely they would have entered into an agreement in May to provide equipment to pub operators over three years if they were likely to hit insuperable cash problems later this year.

Dead right. We may see a little dilution but there's no way this'll go down the tubes.