i-mate is a developer and supplier of high-end wireless integrated pocket pcs and smartphones, specialising in the Microsoft(R) Windows MobileTM operating system

Forecasts
Year Ending Sales (m) Pre-tax (m) EPS P/E PEG EPS Grth. Div Yield
31-Mar-06 263.00 31.37 13.19p 17.2 n/a n/a n/a 0.0%
31-Mar-07 408.85 50.60 20.54p 11.1 n/a n/a n/a 0.0%

Summary financial information

Year ended Year ended
31 March 2004 31 March 2005
$000 $000

Turnover 37,916 136,151
Gross Profit 8,158 35,057
Gross profit margin 21.5% 25.7%
Operating profit 1,851 14,350
Operating profit margin 4.9% 10.5%
Net cash inflow from operating activities 4,115 12,175

Buy i-mate
Says Rob Cullum of Trendwatch.co.uk
In September last year, i-mate floated on AIM. Most people in the UK won't have heard of it. But if you live in the Middle East, Australasia or South Africa, chances are you'll recognise the name immediately.

I-mate makes combined phones and personal digital assistants (PDAs) that run Windows Mobile software. These devices are sold in volume in the regions mentioned above and have just started to appear in Europe. Its product range currently consists of 7 pocket PC devices and 4 smartphones, up from 6 devices in the previous year.

Jim Morrison founded the company in 2001. Not the iconic lead singer of The Doors, but the former head of mobile products at BT Cellnet, who helped create the product that eventually became the impressive O2 xda - a product I just happen to be familiar with, as I own one!

These devices are designed and developed in collaboration with its manufacturing partner High Tech Computer Corporation. Based in Taiwan, High Tech has grown rapidly of the past few years to become the world's biggest manufacturer of PDAs.

Let's turn our attention to the financial side of i-mate. Just because the company only recently floated on AIM, don't be mislead into thinking that this is some kind of start-up. This is a very substantial and well-established operation. For the six months ended 30 September 2005, i-mate reported turnover up from $40m to $95.1m. Its interim profit was up from $3.7m to $12m. Because the majority of transactions are passed through its Dubai office, it expects to pay an overall rate of corporate tax of between 4% and 5%

Sales growth is phenomenal. Sales to the Middle East over the six-month period soared by 91% compared to the corresponding period last year, to $39.6m. Here, it was helped by the introduction of a second mobile operator in the kingdom, Mobily, which conspicuously featured i-mate's products in its new retail outlets. Sales to Australasia increased by 62% to $14.1m.

The company has only recently launched its products into a number of Western European countries including Italy, Spain, Portugal, UK, Netherlands and the Nordic countries. As a result, the most significant growth during the first half came from Europe, where sales quintupled to $30.9m, admittedly from a low base of $6.3m. It also commenced shipments to the US, with initial sales of $2.2m.




Here in the UK, sales are growing strongly, thanks to distribution by Dixons plus over 100 other retail sales partners in the UK, plus 47 corporate and system integrator partners, including Dell and Computacenter.

Just because everything looks set for rapid growth doesn't mean that i-mate is devoid of risk. No share is devoid of risk. I-mate should be inherently less risky than many relatively new companies, given that it is already a sizeable, well-established company. Even so, i-mate has already experienced one technological glitch, related to the latest version of Microsoft's ActiveSync, the program that synchronises data between mobiles and PCs. New security features in versions 4.0 and 4.1 of ActiveSync blocked the transfer of data from PCs to i-mate's products. A software patch from Microsoft cleared the problem but led to a slowdown in product shipments. I-mate says it does not expect this to have a material effect on its results.

Another risk factor is that it operates in a highly competitive market, with powerful and longer established players such as Nokia, Motorola, Sony Ericsson, Samsung and the rest.

Nevertheless, stockbroker Bell Lawrie White expects profits to surge from $14.4m last year to $31.4m this year and on to $48.7m in 2007. This quite exceptional rate of growth gives a PEG of about 0.2 for this year and 0.25 for 2007. These PEGs are among the lowest on the whole stockmarket, indicating that the shares appear to be sharply undervalued, given the exceptional high rate of earnings growth.

Why do the shares appear to be so undervalued? It's not because there's a catch. In our experience, undervalued shares often sit around on the market for a long time; glaring anomalies that give the lie to the 'perfect markets hypothesis'. Indeed, it's the very existence of such anomalies that makes it possible for TrendWatch to outperform the market so consistently.

nIn our view, i-mate is undervalued for no better reason than the fact that most investors haven't discovered it yet. Given that this is a company capitalised at over 355 million pounds and growing

IMTE may have had a hickup but if we are looking for a strong growth stock, then this surely is one to be in. Profits may not quite hit the projected 31.4 million for this year, but I doubt it will fall far short of that figure.

"..stockbroker Bell Lawrie White expects profits to surge from $14.4m last year to $31.4m this year and on to $48.7m in 2007. This quite exceptional rate of growth gives a PEG of about 0.2 for this year and 0.25 for 2007. These PEGs are among the lowest on the whole stockmarket, indicating that the shares appear to be sharply undervalued, given the exceptional high rate of earnings growth."

I got a K-Jam 3 months ago and it's spot on.Got 4 full films on a 1 Gig memory card.Had no problems with it at all,having Wi/Fi built in was the main reason for buying one.

banjomick: Sounds as if we are on to a winner!

grevis,
Not a holder meself,was just a quick endorsement of the K-Jam.
Good luck

banjomick: It's a shame you're not in on these. Up 4.4% today. Cheers!

I've gone in for a 1000 shares--ready for the ride up!!

moneyplus: Well done. Hope you managed to get in at a good price. Friday showed a strong rise. Next target level is 260 to 270. Good luck!

Companies with i-mates record of growth and prospects are rare. They've already shown that they can grow markets and improve profits at the same time. Their current price presents a good buying opportunity. That blip seems to have been short lived as Friday showed a jump of nearly 9%. Incidentally that's close to the rise also seen in the shares of Cambridge Silicon radio(CSR), another tech stock that I hold, which jumped 11%. Both are producing products that are in high demand. Long may their success continue to drive their stock higher. Good luck!

I've taken this information from their last reported accounts (RNS 9 November 2005). It paints a very impressive picture!

Geographical Information

The group has one primary class of business which is the design and development
of wireless handheld devices and carrier based services for the world mobile
market. An analysis of turnover by destination, operating profit and profit
before taxation of the group by geographical segment is set out below:

(a) Turnover by destination Six months Six months Year
ended ended ended
30 September September 31 March
2005 2004 2005
(reviewed) (reviewed) (audited)
$000 $000 $000

Middle East 39,576 20,772 67,666
Australasia 14,143 8,738 21,278
Africa 6,505 2,868 8,542
Europe 30,935 6,289 35,567
North America 2,214 - 1,029
Asia 1,705 1,335 2,069

95,078 40,002 136,151


(b) Profit Six months ended Six months ended Year ended
30 September 2005 30 September 2004 31 March 2005
(reviewed) (reviewed) (audited)
Profit/ Profit/
Profit Operating (loss) Operating (loss)
Operating before profit/ before profit/ before
profit taxation (loss) taxation (loss) taxation
$000 $000 $000 $000 $000 $000


Middle East 11,544 11,558 3,320 3,320 13,491 13,491
Australasia 424 451 592 604 905 933
Europe 335 341 (117) (117) 230 230
North America 67 67 - - (269) (269)


12,370 12,417 3,795 3,807 14,357 14,385

UP nicely again this morning. Plus 9% and an MM buy has just gone through

Maximum online buy is currently 750 shares at 2.77p!

Had these on my watchlist, could be on the way back.Mentioned in the Independent on tuesday.

All quiet for some time now. Sp has taken a dive and I'm wondering if anyone is actually usiing these gadgets? Are they competition for Blackberry, or camera-phones? - I don't see what all the excitement is about....
Those that bought a year ago 2+ are looking a a severe loss with sp today abt. 50p . . . they have cash in Bank it seems, what is that "per share" I wonder....not a lot I suspect.....
Anyone?

Anyone watching this one? Interims due soon. Think if no negative surprises since pre-close announcement last month then it looks like it's near the bottom. But then again.... !!

I've just looked at the chart...Have you been drinking?...pull yourself together -):

No. My charts are giving indication possible uptrend starting..... (but will require good interims to get it going)..... They (the company) had techno foresight .... (well Jim lad the original owner did - and he's still the major shareholder) .... but had problems with third party manufacturer in Taiwan..... now have brought more things in house and reorganised product range ..... as usual, time will tell.....

The words "Risky" and "To" come to mind on this one I'm afraid, but as you say time will tell.

Well someone was busy twanging in a stream of buys in 2.5k parcels during the last half hour of trading.... Good news anticipated from Dubai HQ next week? Time will tell but await next week with interest.....