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.

Wish I was one of those private customers . . . .

I wonder what they paid. Quite an upsurge in activity since the placing including a single transaction for 5m at 2.00p today at 14.11. Buy/sell not indicated but looks as if it may have been a buy.

Don't feel envious. I would guess they paid through the nose. These boys are not known for their generosity!

You can bet your last it was less than 2p, though - and I'd be surprised if it was much more than 1.5p. A bargain for the buyers, and a tidy profit for the seller.

ST, see link to latest broker research report from HB:

http://www.hoodlessbrennan.com/CMS_FileCache/HOODLE004_595_1.pdf

From the HB report, 0.6m rasied at 1p.

Company now dependent upon achieving its sales goals.

HB Re-assessment from Spec-Buy to High Spec Buy

Silvermede, that's a great find, thanks very much!

I found I agree with most of what HB had to say, although I'd be slightly more optimistic when it comes to the comment under weaknesses that "Legislative changes may be needed to stimulate demand", as I think the product is exciting enough on its own merits to attract demand from industrial customers. WDIK, though - I'm not the expert!

All in all I'd say HB have taken an adequately conservative and realistic approach. Their comment that QTI may need a further fundraising is fair comment and worth bearing in mind. All in all I see nothing to deter me from continuing to hold, although I'd possibly hesitate to add a lot more to my holding as I consider that QTI occupies enough space in my portfolio at present.

Once again, thanks for a very useful article!

Interesting report - the 100k turnover estimate to Y/E June 2006 looks on the low side.

Results due any day now?

Still a very wide spread - 0.75/1.75 this morning with a buyer at 1.4.

Only one trade today, but a biggie by QTI's standards. Somebody invested nearly 25k . . . .


Trade time Price (p) Volume Assumed purchase/sale* (p) Bid (p) Ask (p)
13:00 1.5 1629000 purchase 0.75 1.75


Could be a good signal . . . .

Yes, just noticed that. Within what time frame are you expecting the results?

Just seen on the other side:

jonwig - 29 Sep'06 - 14:33 - 234 of 234


S-T.
It was a 'B' trade, and late-reported (L):

"Broker to Broker
A transaction between two member firms where neither firm is registered as a market maker in The security in question and neither is a designated fund manager."

So it might just have been a family transfer, or a trade at mid-price delayed from earlier in the week.
I suppose the fact that one party was willing to buy @ 1.5p is encouraging.

ENDS

Make of that what you will . . . .

PS I have dropped Mike Tapia a line to get clarification re the date the results will be released.

OK thanks. Be interested to see what he has to say. I remain cautiously optimistic.

Another B trade - 2.264m at 1.5p

Qonnectis has been awarded a 52,000 stg order from an unnamed new utility consumer to develop a product incorporating some of its existing intellectual property.

Thanks for the heads-up, Jmac. That's very good news.

Here's the RNS:

Qonnectis plc - Re: New Contract
RNS Number:2864K
Qonnectis plc
11 October 2006

For Immediate Release 11th October 2006

Qonnectis plc

Re: New Contract

Qonnectis plc ('Qonnectis' or 'the Company'), the energy and water conservation
IT services provider, announces that it has been awarded a project by a new
utility customer to develop an innovative product incorporating some of its
existing intellectual property. The value of the order is 52,000, which will be
reflected in the financial statements of the Company for the current financial
year.

This is good news, but a 52k order equates to what percentage of profit?
QTI needs much bigger orders than this to impress the market.

Harry, you're quite right. No-one said today's news was going to set the world alight, and indeed a few of us have spent some time earlier on this thread going into what it would take to make QTI profitable.

However, what is pleasing to me at least is that QTI is winning this kind of contract, and indeed some much bigger ones, on a regular (if not quite regular enough!) basis and that this appears to offer proof of concept.

The stock will probably be a bit of a slow burner for a while longer, but I am hopeful that the next financial results will show a significant increase in turnover, as per trading statement of 14th July.

Whether the increase in turnover will "stick" and the co will continue upwards to profitability is still wide open, but now that I'm in I'm staying committed (rather than take a chunky loss, admittedly).

Each to their own - this is worth sticking on a watchlist somewhere, if nothing else, IMO!

Morning all,

have just received a reply from Mike Tapia regarding the results. Last year the results came out late because the co was negotiating lower fees with its auditors, so MT explained to me, so the vagueness should not necessarily be taken to be a bad sign.

Dear (Soul Traders),

I trust you are well. As you are probably aware the results must be issued
before the end of December. We are not declaring a date at the moment,
suffice to say it will be before this time.

With best regards,

Mike