Location Sciences Group Plc

Location Sciences Group Plc (LSAI) is a data intelligence company verifying the quality and accuracy of location data used for the purpose of advertising. The company works as an independent, third-party data verifier for its customers.

Recent News
Location Sciences Group Plc announced the selection of Shore Capital and Corporate Limited as Nominated Adviser. Shore Capital to work as a sole broker for the company with immediate effect. The Shore Capital selection was followed by the acquisition of Stockdale Securities Limited by the Stockbrokers firm.

Location Sciences Group Plc announced the selection of Donald Williams “Donnie” as director non-executive with immediate effect. Mr Donald has around 13 years of experience and previously worked with Horizon Media Inc as Chief Digital Officer. He held many responsibilities such as operations, capability establishment & implementation, marketing and business development.

Financial Highlights – Financial Year 2018 (£)

(Source: Annual Report, Company Website)
 
For the financial year ending 31st December 2018, the company’s revenue surged by 59.29 per cent to £751,853 from £471,993 in the FY2017. The increase in revenue was due to two funding rounds completed by the company in 2018. The company’s gross profit stood at £369,580 in FY2018 versus £306,274 in the FY2017. In the FY2018 period, the company had been able to significantly reduce its administrative expenses, which resulted in a decline of operating loss for the period. The company’s operating loss for the period stood at £1,732,762 in FY2018 as against a loss of £3,660,000 in the FY2017. The company’s loss before tax for the period stood at £1,732,516 in FY2018 as against a loss of £3,801,781 in the FY2017. The loss for the year attributable to the shareholders stood at £1,487,534 in the FY2018 as against a loss of £5,374,380 in the FY2017. The company’s basic and diluted loss per share stood at 0.98 pence in the FY2018 versus a loss per share of 7.51 pence in the FY2017. The company’s net assets for the FY2018 stood at £4,187,730 versus £2,551,731 in FY2017. The company’s cash balances for the financial year 2018 stood at £2,615,455.

Share Price Performance

Daily Chart as at July-12-19, before the market close (Source: Thomson Reuters)

On July 12, 2019, at the time of writing (before the market close, at 11:10 AM GMT), Location Sciences Group Plc shares were trading at GBX 4.125, up by 4.43 per cent against the previous day closing price. Stock's 52 weeks High and Low are GBX 4.20/GBX 2.00.

Conclusion
The company had shown improved financial performance for the period as compared to the last year performance. The company’s revenue had increased, and the company had better control over its expenses for the period.  The company’s profitability margins are still in the negative zone.

The company’s services had been adopted by 50 new brands for the period.The company raised £3.36 million via two funding rounds in the financial year 2018. The company also signed new core customers, which include Talon Outdoor Limited and CACI.

The company mainly operate in the United Kingdom and is increasing its investment in the United States, which may put the company into foreign exchange risk. The company being in development phase might not be able to meet its current liabilities, which may result in liquidity risk.

Based on the risks associated with the operations of the company, we recommend investors to keep a cautious “Watch” on the stock at the current price of GBX 4.125 (before the market close), while any correction with support from few catalysts needs to be evaluated at a later stage.

Feedback Plc

Feedback Plc (FDBK) is an Electronic & Electrical Equipment company specialising in medical imaging technology. The company, through its subsidiary Feedback Medical Limited, provide innovative systems and software. The company’s products are used by medical researchers, clinicians and radiologists for the improvement of workflows and to get insights about the diseases such as cancer.

Recent News
On 10^th July 2019, Wednesday, the Feedback Plc announced the strategic review after the selection of Dr Tom Oakley as Chief executive officer (CEO) in April 2019. As per the review, the company assessed its existing portfolios. The company prioritisedits Cardanportfolioin the first phase of review. The company also announced its trading update. The unaudited revenuefor the year ending May31st, 2019,surged by 23 per cent to £563thousand from £458 thousand in the last financial year.

 Financial Highlights – H1 Financial Year 2019 (£, thousand)

 (Source: Interim Report, Company Website)

For the first half of the financial year 2019, the company’s reported revenue surged 3.05 per cent to £236 thousand from £229 thousand in the H1 FY2018. The revenue was increased due to an increase in international traction and improved operational structure. The company’s gross profit for the H1 FY2019 stood at £235 thousand as against £223 thousand in H1 FY2018. With the increase in the other operating expenses for the period, the company’s operating loss increased by £55 thousand to £407 thousand in H1 FY2019 from a loss of £352 thousand in H1 FY2018. The company’s Net loss attributable to shareholders for the H1 FY2019 stood at £369 thousand as against a loss of £348 thousand in H1 FY2018. For the first half of the financial year 2019, the company’s basic and diluted loss per share stood at 0.13 pence against a loss per share of 0.14 pence in H1 FY2018.

Share Price Performance

 Daily Chart as at July-12-19, before the market close (Source: Thomson Reuters)

On July 12, 2019, at the time of writing (before the market close, at 1:15 PM GMT), Feedback Plc shares were trading at GBX 0.775, same as the previous day closing price. Stock's 52 weeks High and Low are GBX 2.50/GBX 0.6301.

Conclusion
Although the company’s revenue rose in the financial year ending 2018, the profitability margins have remained stagnant or declined. The change in the company’s operational structure had increased the revenue, but on the other hand, resulted in increased operating expenses as well. The company operates in a challenging environment which requires continuous investment, sometimes at the cost of profitability, to stay ahead of competitors. Moreover,the company is trading near its 52-week low, raising doubts at its upside potential at current prices.

Keeping in mind the weak financial performance of the company and risk associated, we recommend the investors to “Avoid” taking fresh positions at the current price of GBX 0.775 (before the market close).

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