MINORPLANET 2004

Minorplanet looks to turn the corner








Vehicle tracking outfit Minorplanet Systems remains on the lookout for funding after a tough year of restructuring but new boss Terry Donovan reckons the company is well placed to make progress.

Minorplanet (MPS), which specialises in telematics for commercial fleet vehicles, suffered losses of £6.8 million before exceptionals compared with a £1.9 million profit this time last year. Turnover for the year to August was down from £44.4 million to £31.3 million.

The slide in profits and turnover partly reflects the scaling back of the company over the year with the closure of its loss making operation in Italy and the disposal of its operations in America, Spain and France during 2003. The board of Minorplanet has also been restructured during the year with turnaround specialist Terry Donovan taking the chief executive role last month.

Donovan told Citywire: 'I want to be able to put the company on a more stable financial footing. The company is a great opportunity. Minorplanet is in a good market with an awful lot of opportunity and it is the market leader.'

The £6 million company has recently renegotiated its working capital facility with GE Capital, which will provide it with £1.9 million, and Donovan himself has committed £75,000 to working capital. However despite this the company admitted today it 'continues to explore alternative and additional sources of funding.'

In April the company raised £12.4 million but the majority was swallowed up by existing debts. Finance director David Meltham told Citywire the company is expected to swallow more cash in the first half of this year but should become cash generative in the second half. He is actively pursuing funding and shareholders could be tapped for more funds although Meltham said he was pursuing all avenues.

Minorplanet has managed to keep hold of its 8,000 customers and has a good range of products available. Its products help companies keep a track on their vehicle fleets. It has profitable operations in Ireland, Germany and Holland as well as the UK and Australia.

Citywire Verdict:

The big mistake Minorplanet's previous management made was expanding too quickly both in geographic and product development terms. It overstretched itself and the company has paid for it over the past year. However it has a solid product offering in a growing market and needs the likes of Donovan to focus the company and its sales operations to take advantage.

Funding is an issue and investors in Minorplanet should be braced for the possibility of another fundraising. The share price has slumped this year from 41.75p to today's new low of 4p, down 0.25p. It is unlikely to recover in a hurry but investors should be a little more confident in the future with the new management team in place. Patience is going to be required, Minorplanet has been through a very messy year.


theprophet100 - 31 Dec'04 - 09:56 - 8 of 8 edit


Thanks sharemad, I traded from 2.5p to 4p and just thinking of buying again at 3.875p for the next leg up. The funding situation still needs to be sorted out though so this is not without risk.

is everyone still bearish?