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Questions & Answers
Q: This is a very good idea. I noted that one correspondent wondered whether his Fujin Tech certificate was still valid. I have a Matrix certificate - is that still valid or will I need to get a new certificate? Thanks, Dr. D. G. Newcombe
A: Your Matrix certificate is still valid.
Q: Hi. Like this forum. When do you anticipate you will be making your next trading announcement? And do you anticipate quarterly updates? And can you please post a notice on this board when the brokers issue their note on the Company. Finding information on XPT is not easy! Thank you. William
A: Dear William, We are in the process of completing our interims and would expect to announce in July. I am not sure we will be making quarterly updates but will certainly be updating the market either by RNS or our own website of our trading. Finally KBC have issued their initiation note and it is now generally available. Ian
Q: Hi 26.5.07 KBC Peel as per your reponse to a question dated 2/5/07 were in the process of created a research note. you stated it would be ready in a couple of weeks....Is the note ready yet? Do they give any indication of target prices. will the note be freely available? thanks Sha
A: Dear Sha, The note has been published. It does not give a target price. Regards, Ian
Q: 14/05/2007 - Hi, Could you date the questions. Also 3 of you have bought shares, why ? Michael
A: Yes we can date the questions and have. The three members of the board at the time made the decision to purchase shares because they were able to do so i.e. not in a protected period and because they believe the price represented good value.
Q: 09/05/2007 - Can you please advise if you will be issuing new share certificates in the name of XploiTe plc, or will my Fujin Technology plc certificate remain valid? Thank you. David Richard Loveday
A: Dear David, We will not be issuing any new certificates and yes your Fujin certificate will remain valid. Regards, Ian
Q: 02/05/2007 - I have also recently started to look at xploite and have purchased a modest number of shares, with a view to building up my position as my knowledge of the company increases. My questions are 1) Is Fujin Technology viewed as a core investment for the company, now that you have made a strong move into data management? The companies you have bought are, i think, profitable with strong sales. my understanding is that Fujin has very modest sales (circa £1m) and loses a lot of money.Is that correct? 2) Are there any forecasts available from brokers as to your expected performance this financial year and next? Finally, I must congratulate yourselves on having this kind of forum, very accesable to all investors, thank you. Jeff H
A: Jeff, Fujin Technology came from one of the first acquisitions that the PLC made in December 2003, Intrinsic Networks. We changed the name to reflect the distinct focus that it had on the mobile market and believed that off the back of the global contract with Vodafone that it would prosper. Unfortunately the global contract never delivered anything like what we had originally expected. It is fair to say however that this division has worked extremely hard over the last two years and has now successfully implemented its filtering solution into many Vodafone operating countries and a couple of additional non Vodafone country operators. While it does have modest revenues it will trade profitably this year. The immediate trading performance of the companies recently acquired showed them both to be profitable and to have combined revenues in excess of £50m. Please refer to the relevant RNS for further info. We have just appointed KBC Peel Hunt as our new brokers and they are in the process of preparing a new note which I would expect to be ready in a couple of weeks. Thank you for your kind comments. Our intention in creating this forum was to give all shareholders equal access to the board and answer directly any questions they may have. Regards, Ian
Q: 30/04/2007 - Hello Tony, Paul/Mario here, its seems a long time ago now since are visit to see you down there, hope your all well. My question is simple where do you see Xpolite in the next 12 months ie turnover/contracts! plus in the last company statment it mentioned VOD Australia signing a contract! is that a new contract or part of the existing one. I know your a busy man so ill leave it at that for now. All the best. Regards Paul/Mario
A: Paul/Mario, Xploite is the PLC which has Fujin, Anix and Posetiv as subsidiaries. Our expectation is to integrate Anix and Posetiv into one combined entity. At the time of acquisition they had combined revenues of circa £53m and we paid a total of £15m for both. We will take this combined entity and add to it by way of acquisition in the same we built Matrix previously. We have openly stated that it is our intention to build the revenues of this division through £100m in the next 12 months. The contract with VOD Australia is new in so much we have not sold them to previously but it does fall under the global umbrella contract. Hope that helps, nice to see you still have an interest in the PLC! Regards, Ian
Q: 26/04/2007 - Hello, As a private investor, I am currently starting out on the trail of researching Xploite as a potential home for some of my funds. I am very impressed by what I have learnt so far, I must say. While I realise that you are restricted in how you can comment, I'd be greatful if you could clarify a couple of issues for me. On the website you list three companies as trading businesses under the Xploite umbrella. The chronology of acquisitions includes other names, some of which have not been disposed of subsequently. Does this mean that these companies have simply been absorbed into Xploite/Fujin's operations and 'rebranded'? Secondly, I note that the last two acquisitions have both been of data storage companies. How does this square with a strategy for a diverse portfolio of daughter companies within the aggregate? Thirdly, given the excellent cash balance of the company at present, is it fair to assume that further acquisitions are likely to be pursued proactively in the near future? Fourthly, is there any likelihood that any of the companies daughter companies will subsequently be floated as public listed companies? I hope that you are able to answer these questions, within the restrictions imposed on you, and look forward to hearing from you. Kind regards, Dan Brennan
A: Dear Investor, Thank you for your enquiry. I will try to answer your questions in the order that you ask them. Xploite began life in April 2003 with the acquisition of Matrix Network Solutions. At or about the same time I among others invested £300,000 to begin a consolidation process in the IT Networking space. We made a total of 9 acquisitions commencing December 2003. From these 9 acquisitions we created three trading divisions covering Integration, Distribution and Mobile technology. In February 2006 we sold the distribution division for broadly what we paid for it. This was because we saw declining margins and decided not to invest any more resource in this area. Also, the synergies that we had anticipated running into our Integration business had not come to fruition. In June 2006 we sold our Integration business for up to £40.5m. This was later reduced to £40m on the basis of an early settlement with the acquirer. The metrics of that sale were that we aquired 6 businesses that made up that division for a total cost of £19.27m in cash and shares. At aquisition these businesses had a combined turnover of £27.19m and generated a PBT of £1.7m. When this division was sold, it was forecasted to turnover £49.8m and deliver a PBT of £5.6m. This clearly demonstrates the trading performance of this business and the synergies and growth we were able to extract as a result of our consolidation. The last trading division covering mobile technology is still owned by the PLC and is of course FujinTechnology. To answer your first question, you can see therefore that with exception of Fujin all the other acquisitions have been disposed of. Having successfully created £20m of gain for our shareholders from a £300,000 start we are now focused on the area of storage and servers or simply data management. Once again this appears to us to be a highly fragmented market and we have chosen IBM as a strategic partner with whom to work. We have the full support of IBM in this regard. I believe that while the PLC has the opportunity to create value in many areas of IT services it is best served by focusing on as few areas as possible in the short term. Hopefully this will have answered your second question. It is true to say that post the year end the company had an excellent cash balance. Since that time we have returned a little over £10m to shareholders and utilised a further £15m acquiring the last two companies. As a consequence the PLC is now cash neutral. The companies we now own are broadly equal to the size of the business we sold in June last year. It is definitely our intention to continue to build upon this base with further acquisitions. In the past we have looked at various ways of achieving shareholder value from the gains made. We looked long and hard at separately listing one or more of the trading entities. At the time we could not see a cost effective way of achieving this. In financial terms alone it would have cost close to £1m to achieve a spin off and the PLC was not in a position to stand this cost at the time. I would not however rule this out as an option in the future. Regards, Ian