SUPERSCAPE UP 12% TODAY WITH RESULT'S NEXT TUSEDAY SO GET IN AND MAKE ££££££££

Here's one attractive alternative - EPIC is "KTS"

Found this on Michale Walter's website, im in, potential looks huge. According to yesterdays independent they need just 100 terminals to breakeven, which imho is not difficult.



Tapping into secret Knowledge

What it is to be among friends. Knowing that this story will go out initially only to those who have paid to join my website makes it so much easier to talk about a tiny, speculative company whose shares rarely change hands - but one which could produce spectacular results if it gets things right. What fun.

It has always been my view that if I can deliver good gains to even two or three investors, it is worth doing, so long as I explain the risks. That is why I am featuring a fascinating little company with a market value of just £1.9m, only two market-makers, and a normal market size of just 5,000 at each place. I fear this comment alone will generate a disproportionate rise in the share price, so be careful, very careful.

The company concerned is Knowledge Technology Solutions (KTS), and the shares trade on AIM, with a dreadful dealing spread of 2p to 3p. Excuse the extended opening preamble. I have written it deliberately so that the company name will not feature in our general e-mail, and will only be available to subscribers who can access the whole story.

The warnings must go on before I get to the meat. Only the very fastest subscribers will be lucky to get the shares at anything like 3p or 4p. Unless the opportunity to get out brings a sudden rush of sellers, I doubt it will be possible to buy too many at even 5p. For now, I would not pay more. If you are tempted and the price has run too far, wait and watch. On past form, the price could drift back over the next few weeks, though this piece might help support it at higher levels.

Make your own judgement. I do not intend to trumpet any rise in the price as a great triumph. As I say, if only two or three subscribers benefit, so be it. But the story is a good one, whatever.

Knowledge Technology came to market last December at 4.5p, with Beaumont Cornish as nominated adviser and Hichens Harrison as broker. I suspect a fair chunk of stock passed through the hands of one of the small broking businesses which buys lines of small company stock, chops them up, and sells them on for a profit to individual investors. Since then, it has virtually vanished, joining the market’s living dead - the quotation lives on but there is rarely a sign of life.

Unlike so many of the dot.com and tech casualties, Knowledge Technology has not come unstuck. Far from it. Under chief executive Dr Marc Pinter-Krainer, a 29 year-old with a couple of PhDs in Physics and such, it has been developing a product which might just transform the company.

Pinter-Krainer and his small team have been working on Market Terminal, which delivers market data to City screens at a fraction of the cost of the Bloomberg and Reuters screens which dominate City dealing desks. The big brands cost £1,200 to £1,500 a month, and carry a constant stream of instant information vital to City traders. Much of it, however, is redundant for many users. They concentrate on a small selection of the information available to them, leaving the rest unused. And the screens require specialist installation.

Market Terminal is aimed at a gap below these expensive monsters. Many in the City do not need the full Bloomberg or Reuters services, and their jobs are not sufficiently high-powered enough to warrant such expensive support. Market Terminal can offer carefully selected information, tailored to individual needs, and available on any pc, desktop or laptop.

This exploits the company’s skills in developing software which aggregates and processes information over the internet. Working from a centralised data base, it can pick out what the user wants and send it out over the net. It is a simpler, cheaper way of accessing information, and should cost between £200 and £300 a month for each user. It is also more flexible. The user is not bound to a particular screen, but can pick it up from different locations, a net-connected desktop, or perhaps a laptop linked to a mobile phone.

Given that everyone is the City is now devoted to what is laughingly described as down-sizing, Market Terminals sound like manna from Heaven. Initially, at least, the company does not expect them to oust Bloomberg and Reuters, though that is clearly possible. Instead, the screens will be introduced as cheaper alternatives for particular tasks, and will appeal to those whose activities do not justify the cost of a full-screen service.

Sounds good, so far. The problem is that there are no customers yet. The system is being beta-tested by a major City financial services company. No-one will say who. The tests mainly have Knowledge Technology in working to ensure that it can deliver just what a company actually needs, as distinct from devising a package and letting the company work around that.

The few who have noticed what is happening have assumed that giant investment bank HSBC is the beta customer. It is not. But HSBC must be watching. A while back, after seeing one of the Market Terminals, HSBC Investment Bank agreed to subscribe for 5 million new shares in the company at 2.5p each. An investment of £125,000 is peanuts for HSBC, and is all the more remarkable because of it. Normally, such a house would not even sneeze at such a piddling little company.

It gets better. While HSBC was looking, it emerged that specialist penny stock technology investor Billam had been sweeping up shares in the market, and was keen to take more. In the end, the company held an EGM to enable it to issue shares not just to HSBC, but also to Billam, which now has 5.8m shares at an average cost of 2.4p.

This mini-scramble for stock means the company raised £250,000, and is sitting with more than £500,000 cash, while burning only around £20,000 a month. At the end of June, it announced sales of £90,000 for the half-year to March 31, and pre-tax losses of £138,000. There are perhaps a couple of dozen employees, devoted mainly to developing clever stuff with software.

There is also an investment site - www.sharepages.co.uk. In style, this is diametrically opposed to this one. It has not chat, but statistics and such. And the clever Mr Pinter-Krainer and his team have succeeded in automating it. There are no fussy, expensive journalists to keep happy. The site is plugged in to assorted information providers, chops up the info, mixes it, and spits it out in a variety of forms to suit the user. These days, life is hardly rosy for any financial site (but, thanks to you, dear reader, we are coming along nicely). Sharepages generates modest income from sponsorship and advertising, and makes a tiny profit.

Alongside this there are other smart systems in development. Basically, though, the thrust of the company is behind developing and promoting Market Terminal. That is due to be launched late October/early November, when the company expects to announce that it has snared some customers.

If that happens, life suddenly looks much more appealing. Knowledge Technology keeps costs low. It should be breaking even with between 20 and 30 users of Market Terminal. Some fancy that break-even could be even lower.

That suggests that 500 users would generate more than £1.2m of revenue in a full year even at the minimum subscription of £200 a month. At which point, the company might be facing profits of £800,000 in a full year, and at 2.5p the shares would be selling on little more than three times earnings.

Fanciful ? Maybe. So far, remember, there are no sales of Market Terminal. But one City house is testing it, and HSBC clearly feels well-disposed. In the great City greed league, the cavernous dealing sheds behind the marble halls gobble up such screens. The market is worth a fortune, with the likes of UBS placing orders for 10,000 screens a throw with the majors.

Here we have a tiny company with a money-saving product at a time when everyone wants to cut costs. A mere 500 users in the first year would make the shares look very cheap, with the downside covered by the prospect of break-even at sales of maybe a couple of dozen. And there is cash enough to survive for a couple of year unless the marketing effort goes mad.

Of course there is a risk buying into such an unproven tiddler when the shares market is so illiquid. The shares are liable to rocket on modest demand - but could slump in the face of small selling. Happily, that tight market means you cannot chance too much of your cash. But if you can tuck away £500 worth, or maybe even £1,000 worth, they look a pretty fair bet. Who knows what could happen if the Market Terminal catches on?