Virtual Queuing systems

2nd Dec '08 by promethean

16 comments 4575 reads

LO-Q is a tiddler... barely a £6m market cap, but it looks to be gaining significant traction in it's chosen markets.

The latest statement showed great management confidence... earnings are expected to come in at over £1.85m helped by the dollar and strong trading, making EPS of at least 12.4p on turnover of £10m + .

Not only this, but LOQ is one of only 3 stocks in the entire AIM market showing on the new highs list on a 12 month basis...

It's a pretty strong little business this, with ROCE now up to 80% or so... on a p/e of barely over 3 times I think this is being unjustifiably ignored by the market... maybe it's just too small?

Have to do some more digging.

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About the Author

Promethean

Premium Member

16 comments

MrT

2nd Dec '08

These guys basically sell low power radio tagging technologies to improve guest experiences in theme parks. Trading performance in the year to date is ahead of expectations, and they have just signed a one year trial of their VQ2020 system with the Dreamworld theme park in Australia. This is supposed to be a big deal for them since it illustrates that the system is international and can be deployed anywhere in the world quickly and efficiently. I don't own any myself and am keen to better understand the IP protection on the technology first before committing any capital to it.

promethean

3rd Dec '08

I doubt there is any IP protection. It's just RFID... the barriers to entry technologically are probably quite small, but that doesn't mean there is much competition due to the usual factors of reputation, social proof and the like - because Legoland etc use them successfully other theme parks will follow suit and I'm sure that's why the revenues have just started really taking off.

I am still learning about the business, but Lo-Q give their customers a double whammy of revenue boosts.... firstly, customers going to a theme park pay 5 to 10 quid for the Lo-Q gadget, after which they can queue virtually, freeing up time for them to eat hamburgers with the kids, or go on more rides... so revenue increases for theme parks and lo-q gets a commission... very nice model.

promethean

25th Jan '09

http://development.stockopedia.co.uk/news/announcement/LOQ/090123loq1152m.htm

Trading update... inline with expectations... 3 new parks added.

StrollingMolby

31st Mar '09

LOQ are due to release their 2008 results next week, and as per the 23 January Trading Update, will post profit before tax of at least £1.85m (238% + higher than 2007). I expect Turnover to be approx double too, at around £15m (with additional FX gains coming from USD earnings). I think once the market sees the results in black and white we will see an uplift here from the current PE of around 3.5. Any other holders here care to comment?

promethean

1st Apr '09

SM - we've had a bit of an uptick in the last few weeks as the scalpers have taken positions pre-results. I have a grim feeling that this is going to be another of those buy on rumour sell on news situations.

Lo-Q have a nice product and is growing quickly, but it's still a tiny company and too illiquid for most funds. Against a backdrop of credit deflation, small caps such as this are going to continue to struggle to find significant buyers... On the other hand... I agree that the rating is way too low. Lo-Q deserves to be trading at double today's price.

Gradders73

1st Apr '09

It's a very interesting company, with a good product. I suspect the easiest route to a quick return would be if they became an acquisition target - any potential bidders out there?

gb1967

2nd Apr '09

i follow this company closely as I picked up a few hundred thousand when they were 5-10p. Bartronics, an indian company are a potential bidder but I dont see it until the board have grown it to at least a 20 million market cap company.

They are in discussions with an asian chain , another australian site plus Hershey and Cedar fair in the states so there should be quit ea nice bit of growth for 2010. About 30% of any turnover falls straight to the bottom line. A major park should add £300 000 to the profits and a minor one about £100, 000. Also the current financial year looks like panning out at 1.45 dollars to the pound instead of 1.76 so a probably 15% uplift there.

MrT

3rd Apr '09

From 5p t0 50p, nice work, gb1967. I was overly sceptical on this one in Feb and have missed out on a good gain. It's rocketed in the last couple of weeks especially. Is that driven by the rumoured M&A then?

gb1967

3rd Apr '09

I think its a combination of new buyers entering loq and the fact that somone who was unwinding a significant position has been cleared out. As the tax year ended, every buy between 35p to 45p was matched with an equivalent sell but that seems to have dried up. The management are superb. They kept this alive when many ould ahve folded and have experience of turning small companies into multi baggers - especially John Lillywhite.

There is significan IP protection as thye have patents over many things. They have a new product about to launch aimed at water parks plus text-q , a lite one queue mobile phone based solution should gain more customers soon.

gb1967

6th Apr '09

fantastic results 2.6 million in cash, no debt
profit 1.85 million
new contract announced
current start to the year good.

PE still under 3.

Murakami

6th Apr '09

Adding the results link - www.stockopedia.com/news/announcement/LOQ/090406loq1603q.htm

marben100

15th Jun '09

LO-Q's largest customer files for bankruptcy: http://www.ft.com/cms/s/0/fbb4c038-592c-11de-80b3-00144feabdc0.html

IIRC, something like 80% of LO-Qs revenues come from Six Flags. Their bankruptcy was not, however, unexpected and serious LO-Q investors were well aware of this risk. The question which will now be answered is whether the bankruptcy will affect LO-Q's contracts with Six Flags.

Judging by the article:

Mark Shapiro, chief executive, characterised the bankruptcy filing as “cleaning up the past” by restructuring the debt load built up by the company’s former management, which was ejected in late 2005 after a shareholder revolt led by Daniel Snyder, owner of the Washington Redskins, and backed by Bill Gates’ Cascade Investments.

it sounds like there will be no change to Six Flags' management.- and why should there be with an operating profit of $275m last year? AIUI Lo-Q's relationship with Shapiro is excellent. Next week's AGM should provide an excellent opportunity to ask LoQ management about this.

I halved my LoQ holding a few weeks back, in fear that the swine flu pandemic might impact visitor numbers - which now looks much less likely. Today's news might provide a buying opportunity that I might take advantage of.

Regards,

Mark

6502

15th Jun '09

No real comment about SixFlag's Ch11 filing, except it's hardly unexpected and at least their precarious financial condition is now moving towards being resolved.

Having just discovered the thread, I wanted to respond to

I doubt there is any IP protection. It's just RFID

from 3 Dec.

Firstly - it's not RFID. A QBot is battery powered and they setup a local low power radio mesh talking to other nearby devices to propagate information (eg wait times and reservation requests) to all nodes that need to know.

Regarding IP protection, patent numbers are here, http://www.lo-q.com/our_company-research_and_development.html or search espacenet for Leonard Sim as inventor.

To my reading, they do have patent coverage over the essential QBot concept. This seems about as good as IP protection gets - to have a downer on it you'd have to think that evading the patent by using paper systems or mobile phone based systems gave a comparable product. I don't think they do!

I don't think TextQ's anything like as well covered.

brucepackard

4th Sep '17

Wow...wished I'd been a stockopedia subscriber in 2008 and read this!

Have you guys really been going since 2008?

hayashi22

4th Sep '17

Love it. RU there promethean and Mr T -can you hear me.??!!
Well done to you and others who got in early doors ( not me) and of course Mr S the most well known supporter.
Life changing stuff.
Actually on a re-read maybe Mr T didn't buy any after all -he didn't seem to be sure.

jonesj

4th Sep '17

There is an article in Saturday's issue of the FT, where John Lee is interviewing David Stredder, with the topic "my favourite stock". Mr Stredder picked Accessso, which is a 207 bagger for him. Unfortunately, there is not a great deal of comment about what characteristics attracted him to the stock originally, but I suppose we should do the legwork ourselves on that.

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Virtual Queuing systems

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Promethean

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