Very exciting opportunity here. It’s a highly speculative investment as the stock ranks indicate, but the rewards if they get it right are significant. The company is loss making but on course to break even in Q1 2020. They provide “Out of Home” Virtual reality experiences. The market cap is £19.27 million.

After experimenting with various different business models, the company have settled on a partnership model. This model is extremely attractive to both parties. Immotion provide the hardware; the content; training and support at their cost. The partner provides the staff; space and footfall at their cost, with the revenue being shared 50/50.

This is a very attractive model for the partner because they are able to add a relevant VR visitor attraction to their site for no upfront capital cost, with an immediate exposure to new revenues. For Immotion the model is attractive because it enables them to have their VR experiences placed in areas of high footfall. Since the marketing and operation of the experience is carried out by the partner, there are very little costs for Immotion once the experience is in place. This affords exceptional operational gearing and profitability potential. Trading has been very promising. Year to date, the average gross revenue per headset per week was £320. This figure averaged £402 per week during the 6 week school holiday period. The partnership estate averaged £381 per week.

The model has attracted some very prestigious partners including the 02, Blackpool Tower, Madame Tussauds and Lego land. The company currently have a total installed base of 256 headsets with a further 33 to install in the next few weeks. They remain confident of reaching 400 installed headsets necessary to meet their short-term monthly objective of monthly EBITDA break-even in Q1 2020. The company have the goal of reaching 1000 headsets by the end of 2020. At an average revenue per headset of £320 that’s a weekly turnover of £320,000. The company have indicated that once they have 400 headsets in the field the revenue from each extra headset goes straight to the bottom line. If they achieve the milestone of 1000 headsets by Q4 2020 whilst maintaining their average revenue per headset, the numbers and profitability look very attractive indeed.

The company did a placing in August where they raised £2.4 million. They currently have £2.3 million in cash. The CEO has indicated they…

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