Gamble of the week Niche British technology firm – MoneyWeek

Thegroups’majorbreadwinner,Vicon(69%ofturnover),sellsadvancedmotion-capturetechnologytogamingcompaniesandHollywoodstudios。

ThelatterhaveemployedtheclevercamerasinblockbusterfilmssuchasTheChroniclesofNarnia,IronMan2andBlackSwan。

OMG’sequipmentisalsodeployedinthelesscyclicalworldofmedicineandsportsscience,whereitisusedtorecordthemovementsofathletes(inabidtoimproveperformance),childrenwithcerebralpalsyandpeopleundergoingrehabilitation。

What’smore,Viconsignedalicensingagreementin2009withMicrosoft,toincorporatetheirSenseCamapplicationintoitsexcitingnewRevueproduct。

Thecameraiswornaroundtheneck,recordsallmovementandservesasamemoryaidforpatientssufferingfromAlzheimer’sDisease。

Acutting-edgeconsumerversionisalsoplannedinthenext12months。

Itsothertwounitsareevenmorestateoftheart。

Yotta’s(23%)advancedsystemsallowhighwayauthoritiestogaugearoad’sconditionbysimplydrivingamountedcameraaround,ratherthanhavingtosendsomeoneoutwithatrundlewheelandamobilephone。

CustomersincludetheWelshAssemblyandtheCheshire/Merseysidecouncils。

Intermsofthenumbers,housebrokerEvolutionisforecasting2011salesandunderlyingEBITAof£31mand£1。

8mrespectively,risingto£33mand£3。

6min2012。

OnthisbasisIwouldratethecompanyonatentimesmultiple,whichafteradjustingfor£2。

3minnetcashanddiscountingbackat12%,deliversafairvalueof43ppershare。

Asasmallerbusiness,OMGcarriesagreaterdegreeofriskthanitwouldwereitlargerandmorediversified。

Itisalsoexposedtoforeignexchange,lumpyordersandmarginpressureandwouldsufferinanotherrecession。

ButOMGisprofitable,wellfinanced,paysadividendandofferstonsofupsidefortheadventurousinvestor。

It’salsoprobablyanattractivetakeovercandidate。

HousebrokerEvolutionhasapricetargetof55p。

Rating:SPECULATIVEBUYat28p?

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