21st Century Technology Plc (LSE: C21) is a specialist service provider to the transport community for tackling complex operational necessity for the vehicle network.
The company has two broader segments - its Fleet Solutions segment provides different services to improve traveller and driver security, like the surveillance of vehicle and the driver, automated passenger counting etc; and the other segment of Passenger Information Solutions provides the vital equipment and programming to capture real-time data, off-vehicle ticketing and navigation.
With more than 20 years of deep-rooted experience in the vehicle business, 21st Century has gained apt expertise in giving new age technology solutions, which provide better traveller experience and give operational advantages to fleet owners and network administrators through its Fleet and Passenger Systems. Now the company is planning to relate the two, to enhance the experience of a connected journey.
The company has a demonstrated reputation of the most excellent installations across multimodal disciplines with accomplished specialities, insights and ability to take on the challenges faced throughout the vehicle business. The company also provides tailormade maintenance and support services and has a dedicated support centre.
Share Reorganisation – For Cost Optimisation
The company is going for a Share Reorganisation exercise and is allotting new shares which will allow the Company to reduce various costs associated with maintenance of a large shareholder register, printing, postage and registrars' costs. The company will seek approval for the Share Reorganisation, Name change of the company and Directors' authorities to allot New Ordinary Shares at a General Meeting to be held on 2 December 2019.
The need of Share Reorganisation arose for quite some time - the stock price of the company has gone below the nominal value of its existing common shares, and issuance of new shares at a particular price has to be looked at post assessing certain requirements.
As on 11th November 2019, post business hours, 78.6 per cent of shareholders had shareholdings of less than 4000 shares, which had a market value of around £140. The proceeds of selling these shareholdings might be uneconomic due to the involvement of dealing costs. Thus, share reorganisation will allow the shareholders to benefit from free dealing charges. The company will issue 245 new shares at a unit price of 6.5 pence.
New Branding Towards A New Direction
The board of the company has proposed a change of name for the company to Journeo Plc with approval from the General Meeting to be held on 2 December 2019. The new name will give new direction and reinforce new branding to the company.
Contract Award Recommendation – A Big Opportunity
The company was notified of contract award recommendation by Finance and Resources Committee of City of Edinburgh Council in October 2019. The award of the contract was through a competitive tender process, regarding the provision of an actual-time commuter information system for the Edinburgh bus network.
The contract is valued at £2.9 million, and the initial term is for 5 years. On satisfactory performance, the contract can be extended twice by 4 more years. It’s a big contract for the company in pipelines, though the approval from the Council and final terms of Contract agreement are still awaited and at present, there is no clarity on the timelines of the contract.
Recent Business Performance For H1 FY19 Period Ended 30th June 2019
The company’s gross profit stood at £2.2 million in H1 FY19 as against £2.4 million in H1 FY18. The company’s overall gross margin stood at 39 per cent for the period. The company posted improved cash balances to £0.4 million in H1 FY19 due to better cash management as against £0.2 million in H1 FY18. During the period, the company invested more than £0.5 million in R&D. The company saw 50 per cent more order intake in passenger systems. The company is seeking new market segments, airports and distribution of hazardous goods which help in expanding the customer base of the company and offering.
The company achieved its maiden sale of passenger information system for a new bus station project in Toronto, Canada. In addition, the company sold its first newly developed LED street displays for West Midlands Combined Authority.
However, the overall revenue declined in H1 FY19, primarily due to the decline in Fleet revenue as the UK’s fleet market remains a bit rough, but now the company is focusing more on sales opportunities. There is a new SaaS offering by the company, which will reduce dependencies on conventional sales models, and it has already identified value, scale and complexity of opportunities in the sales pipeline.
The chairman too has stated that “We have focused on developing new sales and markets and have continued to invest in R&D with a number of notable successes which will come to full fruition in the second half and beyond.”
Overall, the company aims to set its potential given many aspects at hand. It has developed a range of software solutions under the Journeo™ brand, creating a cloud-based video management platform to improve insurance claims handling. It has also been developing new Software as a Service (SaaS) solutions that leverage the IoT and cloud-based computing, which can provide potential opportunities for the company in the era of new regulations.
Share Price Performance- Strong Double Digit Return Of 28.81 Per Cent (YTD)
(Source: Thomson Reuters)
21st Century Technology Plc stock last traded at a price of GBX 3.80 as on 20th November 2019 (GMT: 11:30 AM). The stock has a total market capitalisation of approximately GBP 3.55 million. Over a period of past twelve months, the stock has outperformed the benchmark index and has given a strong return of 22.58%. On a Year to date time interval, the stock has generated 28.81% return for the investors.
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