With a name like SyQic (SYQ:AIM) perhaps investors (and journalists) shouldn't be caught out by surprises, but that's what the company delivered today, and a very positive one too. The mobile video content supplier's trading update effectively says it is on track to beat current forecasts this year.
The business generated revenues of roughly £2 million in the January to March quarter. What's more, during April and May another £1.6 million of revenue has flowed through the accounts, albeit both figures are pre-audit. That implies an average monthly run rate of £720,000, putting the company on track for £8.6 million for the full year to December. Analysts currently have £7.8 million of sales pencilled in. There's no word on earnings however.
Still, that's a much needed shot in the arm considering that the shares had sunk well below their 62p IPO price in December. Investors accept the forecast hint with relish, sparking a 42% share price jump from 34.5p to 49p. The stock has traded as high as 124.5p, a record hit in March.
But equally important is reassurance on cash collection from its current telco partners through which it largely sells at present. Down the line SyQic has plans to taper its telco arm YooMob and focus on its direct-to-consumer pay-as-you-go payments model, called Yoonic, launched in the UK in December.
'We leave our forecasts unchanged but note that today’s announcement suggests that both our profit and loss and cashflow forecasts are conservative,' say analysts at house broker Allenby Capital. The shares had slumped ahead of last month's full year figures when fears first started to emerge about potentially slowing revenues and cash collection. 'Today’s announcement should go a long way to dispelling these fears and we expect the shares to retrace to prior levels,' believes Allenby.