Shares of Promethean World, PLC (PRW on the London exchange), the nearly exclusive supplier of interactive whiteboards to MCPS, plunged 28% today to an all time low of 0.17 GBP ($0.27 US).
In an interim statement released today, company management said “Demand during the key buying season in the US has been lower than recent years, and this has been accentuated by the delay in a large order, which is now anticipated to be received in the fourth quarter.”
Since going public with an IPO price of 2.00 GBP per share, PRW shares have fallen 1.83 GBP, a decline of over 90%.
At today’s share price of 0.17 GBP, the company’s market valuation is 34M GBP, or about $55 million US. Putting this valuation into perspective, the entire company is worth about the same amount as a typical MCPS middle school building.
Interactive whiteboards, considered to be novel presentation tools just a few years ago, have evolved into commodity devices available from many manufacturers, including companies in Asia where development and manufacturing costs are far lower than in the UK and the USA.
4 October 2012
ReplyDeletePromethean World Plc
('Promethean' or 'the Group')
Interim Management Statement
Continued budgetary pressures. Cost reduction programme progressing well.
Promethean World Plc (LSE: PRW), a world leader in the global market for interactive learning technology, today publishes its interim management statement for the nine-month period ended 30 September 2012.
Trading Performance
The trading environment in key markets during the third quarter has continued to be challenging. Consequently, the quarter and year-to-date revenues for both the North America and International sales regions are down versus prior year comparatives. Demand during the key buying season in the US has been lower than recent years, and this has been accentuated by the delay in a large order, which is now anticipated to be received in the fourth quarter.
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Year-to-date group revenue was £123.2m, 30.0% lower than the same period in 2011 (£175.9m), 30.3% lower on a constant currency basis.
DeleteThird quarter group revenue was £40.0m, down 41.2% versus the third quarter in 2011 (Q3 2011: £68.0m), or down 40.9% on a constant currency basis.
Year-to-date interactive display system revenues were £108.8m, and learner response system revenues were £14.4m, down 30.1% and 29.3% respectively on the same period in 2011 (2011: £155.6m and £20.3m respectively).
Third quarter interactive display revenues were £36.6m and learner response system sales were £3.4m, down 39.5% and 55.3% respectively versus the third quarter in 2011 (Q3 2011: £60.4m and £7.6m respectively).
Year to date volumes of interactive display systems were 102,000 and of learner response systems were 435,000, down 23.7% and 35.1% respectively on the same period in 2011 (2011: 134,000 and 670,000 respectively).
In the third quarter, Promethean sold 37,000 interactive display systems and 115,000 learner response systems, down 30.9% and 53.0% on the third quarter 2011 (Q3 2011: 53,000 and 245,000 respectively).
As at 30 September 2012, Promethean had a net cash position of £5.8m (30 June 2012: £8.5m). The group's borrowing facilities remained undrawn throughout Q3 2012 and we continue to anticipate the group will have a net cash balance at the year end.
Operating cost reduction
Significant and timely progress has been made on the cost reduction measures outlined in our interim announcement. We are now targeting the level of cost reduction in 2013 to be at the higher end of the 20-25% range (versus 2011 levels) that was previously quoted. Consequently, operating costs for 2012 will be lower than previously expected with the full benefits being realised in 2013.
New Products and Initiatives
The first deliveries of the ActivTable have been made during in Q3 2012 and initial customer feedback has been very positive.
The rollout of our ActivProgress software to over 300,000 students in Mexico is ongoing and good progress is also being made on creating a Private Planet community for up to 100,000 Mexican teachers. These projects are a first proof point of our emerging software strategy.
Promethean Planet continues to grow strongly and now has over 1.45 million members, an increase of 33% over the last twelve months, and in excess of 65,000 teaching resources.
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Summary and outlook
DeleteIn the short term, the key education markets are constrained by customer funding issues, especially in the US and Europe. This is reflected by the group's performance year-to-date and in the third quarter, which was also affected by the delay of a large contract that is now anticipated to fall into the fourth quarter.
The cost reduction programmes are proceeding well and Promethean is now targeting to be at the upper end of its earlier range of 20 to 25% overall operating cost reductions. Looking ahead for the current year, however, the group now anticipates that full year results will be below current market expectations.
For 2013, the group expects that market conditions will continue to remain difficult. Promethean is resizing its cost base to reflect these realities, with the aim of remaining an underlying profitable cash positive business whilst protecting its core investments in R&D.
Promethean believes that, over the longer term, the impact of interactive learning technology is proven and this, coupled with the development of our integrated software and hardware strategy, means that Promethean remains well positioned to benefit when market conditions improve.
Enquiries
Promethean + 44 (0) 1254 290749
Jim Marshall, Chief Executive Officer
Neil Johnson, Chief Financial Officer
Citigate Dewe Rogerson Consultancy + 44 (0) 20 7638 9571
Anthony Carlisle + 44 (0) 7973 611 888
About Promethean
Promethean. Spark Inspiration.
Promethean (LSE: PRW) is a global education company. We create, develop, supply and support interactive education and training solutions for schools, businesses and governments. Our products and services are raising learning standards, revolutionising the way people learn and collaborate, making them more engaged, empowered and successful and thereby unleashing human potential. Headquartered in the UK, Promethean World Plc is listed on the main market of the London Stock Exchange. More information about Promethean is available at: www.PrometheanWorld.com.