Steal a march on the tribe
TECHNOLOGY GROUP Zaptronix’s muchpromised turnaround hasn’t yet materialised and the share has suffered dearly in the current bear market. But the equities market can’t exactly be blamed for its lacklustre performance. AltX-listed Zaptronix’s latest interim results to February 2008 didn’t offer much reason for the market to be generous in its valuation.
Zaptronix specialises in risk management services in the energy sector and also provides remote meter-reading systems and prediction planning software to fleet management companies. Imperial Holdings is one of its major clients.
During November 2007 Zaptronix announced a black empowerment deal with the respected Royal Bafokeng Capital (RBC), which bought a 30% stake at more than three times the then market price of 5c/share (after a year-long due diligence). Zaptronix then promised to leverage the RBC’s strength in financial structuring and capital markets to acquire companies that would contribute to its business model. Its aim is to boost its existing business channels – Zaptronix Metering, RMS Technology, ENEO Energy Solutions and DUO Tracking Solutions – “to gain access to markets and capital with significant potential benefits”.
Over the next few months Zaptronix will be reporting its full year to August. And now that it’s completed its restructuring process it should improve on its HEPS of August last year. There’s been no corporate action as yet but the RBC can’t be happy just sitting on the shares, for which it paid dearly. It has an option to buy a further 30% (new recapitalisation issue) at 16c/share within two years, being the price it paid for its current stake in November.
Now that its restructuring is over we reckon the company can’t afford to wait another year to raise funds and embark on its promised acquisition spree. Still at a demanding 31,25 times earnings multiple, investors can steal a march on the RBC and buy at the current 10c/share level. It offers even brighter value and prospects.