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Growing Technology Company Feature

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In search of tech stars  

Ten years ago AIM was enjoying a major boom in the technology sectors with small technology companies reaching amazing valuations. Ultimately valuations collapsed as the great tech bubble finally burst. Nonetheless, the premise that there are tremendous opportunities for niche technology companies is probably truer today than it was in 2000. Today technology is changing even more rapidly than it was 10 years ago as television, broadband, computing, mobile communications and many other fields are undergoing major transformations.


Whether we will see a tech boom ever on the scale of 2000 again is doubtful, but there are sure to be some major technology winners on AIM in the coming years. At aimZine we plan to feature a number of these potential multi-baggers over the coming months.


Today we feature five companies which are already enjoying strong growth in an exciting technology area.


Click on the links below to navigate directly to each company’s section:




Forbidden Technologies

Code: FBT

Share Price: 35.5 pence

Market Cap: £30.5 million



The world's favourite applications, from Google to Facebook, all run in web browsers - on any internet connected computer. This form of computing is called Cloud computing, and Cloud computing is both popular and continuing to grow rapidly.

Everyone has heard of YouTube. Around a billion videos are streamed over the Internet every day. The revolution in video distribution has transformed the global marketplace. Internet video is popular and is continuing to grow rapidly.

But spare a thought for where all these videos are coming from - and will come from in future. There is the low quality, unedited, consumer generated video clips - the type you might shoot on a cheap cameraphone – and there is also the high quality video, which is always edited. A lot of this high quality video comes from expensively produced TV content. But the internet distribution system demands a much larger volume of production than traditional expensive sources such as TV production can provide, so this is being replaced by professionally made material aimed at the web. Newspaper and television station websites use this new material, and even high quality blogs.

A web page doesn't require the same time, effort and cost to produce as a book: a typical internet video is short and quick to make. The expensive traditional broadcast production methods are simply not the best solutions, or the most cost effective ones, for making this type of content. But the wide choice accessible on the web means that poor quality videos will be easily bypassed by the critical internet viewer. Quality is still required on the Internet.

So web distribution is only half the story - the other half is actually making the new videos to put on the web. This is where Forbidden’s Cloud-based video platform, FORscene is leading the way.

Forbidden launched FORscene in 2004. Since then, FORscene has handled over 1,000,000 hours of professionally shot video, and is adding around 12,000 hours each week to this total. FORscene is the world's most advanced professional Cloud editing application. In the professional world it is used for video post production – everything after the video has been shot – and allows video content to be easily edited, to a professional standard, from anywhere in the world.

By developing and building the technology itself, Forbidden also owns the Intellectual Property in the platform. Everything from the video compression used for editing to the user interface is developed by Forbidden. This gives Forbidden a unique flexibility in where it applies its technologies.

Forbidden's unusual fat client approach to Cloud-based video editing allows each server to support vast numbers of users. By minimising the per-user cost of the system, this architecture is ideal for the consumer market, a market that Forbidden believes has significant growth potential for its FORscene platform. Forbidden is now looking at efficient ways to penetrate the consumer market and recently announced a successful demonstration of its FORscene software on the Nokia N900 smartphone.

With the first FORscene Cloud successfully up and running and generating continuous revenues, currently over £250k a year, Forbidden sees Systems Integrators as the next step to increase its FORscene client base. Forbidden recently signed its first Systems Integrator agreement, with Siemens South Africa, and is currently engaging with a number of other Systems Integrators who plan to duplicate and sell the FORscene platform to their customers around the world. Deals such as these generate significant revenue with the potential for continuing revenues if licences are extended.  They also offer Forbidden a route into overseas markets and, in turn, a significant increase in its customer base. If this happens as anticipated, Forbidden's turnover will multiply significantly - with relatively little increase in fixed costs




















significant growth potential

for FORscene platform


Iomart group

Code: IOM

Share Price: 89.5 pence

Market Cap: £93 million




iomart is a fast growing technology company in the managed hosting and cloud computing space, specialising in the design, delivery and management of business critical IT services. The end-to-end services offered by iomart enables companies to outsource their IT infrastructure to a specialist thereby reducing costs and minimising complexity associated with maintaining one’s own web and online applications. As businesses continue to move into the online environment, the benefits of outsourcing are being embraced by corporates of all sizes. iomart counts businesses  such as Stagecoach,  BT and Flightcentre, as clients, offering a resilient and secure environment for mission critical internet-based business operations.


Company Background

iomart is reaching an important stage in its development, coinciding with an exciting time in the market: the growth of cloud computing. Three years ago iomart purchased 4 fully operational data centres across the UK and as a result, the high fixed costs associated with the datacentre business have now been largely absorbed. Additionally, in comparison to other companies in the Data Centre space, iomart’s model is not simply one of selling rack space. iomart instead offers a wide range of high value added and complex hosting services delivered out of its wholly-owned datacentre estate, whereby margins are significantly higher than comparators. By owning the whole end to end customer experience, from data centre through to cloud application, iomart is able to offer its clients a high level of service, with all of its processes being engineered to ensure no single point of failure.  These two strategic factors have meant that iomart has arrived at a tipping point.


Specifically, iomart has reached and grown profitability with only 35% of its datacentre space in use, meaning the potential upside is considerable. If the hosting side of the business were to operate at full capacity, the additional revenue for iomart could be in excess of £40m, on top of the £22m expected by analysts this year. The key to achieving this growth will be a drive in new cloud computing business, which means iomart will place a strong focus on sales and marketing in the year ahead. There is also the potential for accelerated growth through acquisitions, with a plethora of small datacentre and hosting operators in this fragmented marketplace.



iomart’s market is large and growing. A key growth theme for iomart is the relentless and rapid increase in cloud based services and the growing importance for businesses to have a secure and cost effective online presence. The market is showing no sign of a slow down as companies continue to outsource their IT services to the cloud. Some industry research houses are even predicting that of the total IT spend in the UK in 2010 £76 billion (18%) will be spent on Cloud Computing and that this will rise to £119 billion (21%) in 2013. Whilst some of the largest global business will have the ability to manage their own online operations, the majority of tier two businesses and below will continue to find it more cost effective to outsource to specialist providers such as iomart who can offer secure and resilient services.



iomart announced that results for the first half ended 30 September 2010 will be ahead of market expectations stating that it was experiencing increasing demand for its products and services from existing and new customers (market consensus was adjusted EBITDA of £2.35m for the half year and EBITDA between £5.1m and £5.6m for the full year). Having absorbed the high capex and fixed costs inherent to the datacentre model but currently operating at relatively low datacentre utilisation (c.35%), and as the management focus on growing only high margin revenue, iomart is at a pivotal point where additional cloud service revenue is beginning to drive significant margin growth.


On 1 Nov, iomart announced the acquisition of privately owned managed hosting business, Titan Internet Limited for up to £4.2m in cash. The acquisition adds an impressive client list, an experienced team in the managed hosting arena and potentially significant cost savings once Titan has been fully integrated into the Group. This is in line with iomart’s strategy of accelerating growth through acquisitions.

Angus MacSween CEO                   



















increasing demands for its products and services


Avanti Communications

Code: AVN

Share Price: £5.90

Market Cap: £501 million



Nowadays, who needs the internet? The answer to this question is one of the reasons why revenues at broadband satellite operator Avanti Communications are set to soar.


If you currently live in a City or Town across Central and Western Europe then you are probably fortunate enough to live in a ‘broadband zone’. These areas are where telecoms companies, such as BT and Virgin, have dug up land or road to lay cables to service the buildings you live in, allowing you to access the internet; something you probably take for granted.


But what if you live outside of a ‘broadband zone’? Some 30 million people across Central and Western Europe are in this position. Worldwide, that figure increases to around three billion. In the UK, there is uproar about how rural Britain is being left behind in the digital age. Whilst our large cities worry about the next superfast broadband milestone, parts of rural Britain are still on dial-up connections. You only have to type ‘Digital Divide’ into Google to read all about it..


The people who live outside of these ‘broadband zones’ live in areas called ‘not spots’. The cable companies aren’t going to dig up miles of road to get one rural house ‘online’. The costs and technical difficulties in getting internet access to rural areas are prohibitive for this kind of solution. So what do the people who live in these ‘not spots’ do to gain access to the internet? Enter Avanti.


November Launch

Avanti can supply broadband to rural areas via satellite. The Company is launching its first dedicated broadband satellite, HYLAS 1, on 25 November 2010. This will be Europe’s first dedicated broadband satellite. HYLAS 1 uses cutting edge technology that utilises a different type of electromagnetic wave known as the ‘Ka Band’ to transmit data. It is this ‘Ka Band’ that makes broadband possible from satellites, wherever you are.


Satellites can provide different frequencies for different uses. To broadcast large amounts of data over a vast geographic region requires a frequency between 12 to 18 GHz within the electromagnetic spectrum, this is known as the ‘Ku Band’. ‘Ku Band’ satellites are therefore the ideal choice for watching television. However, ‘Ka band’ satellites, that cover the frequency between 26.5 GHz to 40 GHz, allow the focus of spectrum into spotbeams. This enables much faster data transmission over a smaller area, ideal for broadband speed internet connections. HYLAS 1 will offer a 10 Mbs service to customers and current satellites under construction could provide speeds of up to 200 Mbs.


To put this 10 Mbs speed into perspective, streaming High Definition films or television shows from the internet straight away requires a connection speed of around 4 Mbs. Avanti can more than double that for its customers via HYLAS 1 and its cutting edge satellite technology.


So what does it all mean for the customer? From the consumer angle, it’s like having SKY TV. A satellite dish is installed on the side of a house to receive signal from the dedicated satellite, HYLAS 1. The dish is connected to the wireless router and voila, broadband anywhere in Europe. From inside the house, the internet service is exactly the same as if the user was connected to the internet via underground cables and a wireless router. Following the launch of HYLAS 1, anyone who cannot currently gain access to broadband internet speeds will be able to. Internet access will no longer be dependent on location and how close people live to a DSL or fibre optic line.


With Avanti's share price heavily discounted to allow for an element of risk at launch (despite being launched on the world's safest rocket), analysts are expecting the price to soar following the 25 November launch date.


There is more to come from Avanti. A second satellite, HYLAS 2, is currently in construction as you read this and HYLAS 3 has been commissioned for project development. Broadband access for all is a reality and it’s about to arrive, very soon, via satellite.

David Williams CEO                                   









launching first satellite on

25 November 2010



Code: NET

Share Price: 14.5 pence

Market Cap: £18 million




Netcall has undergone a transformative year as it continues along its acquisitive growth path. It is now well set to reap the benefits of an expanded product set and customer base while also seeking further consolidation opportunities in the customer interaction market. Netcall operates in the enterprise communications and contact centre space; its software suite provides solutions to help organisations with their customer engagement, incorporating call handling, callback, smart automation, workforce management and data unification. Netcall successfully completed two significant acquisitions, Q-Max in 2009, a leading provider of workforce management software, and a reverse into Telephonetics in July 2010, a leading UK provider of telephone self-service and call handling solutions. As a result, the addressable market and customer base for Netcall has grown significantly.



Netcall’s addressable market spans all sizes and verticals, essentially applicable for any organisation that has a requirement for contact centre capabilities. Netcall currently boasts many blue-chip companies as customers and enjoys a healthy distribution across industries in both the public and private sectors. With over 600 customers, Netcall’s clients include BT, Cable & Wireless, 78 NHS Acute Trusts, RBS, Prudential, Oracle and McAfee, among others.



The drivers for Netcall are compelling as organisations seek to improve efficiencies and customer service while consumer demands and expectations continue to grow. Importantly, Netcall’s solutions can not only provide improved customer service but also considerably reduce costs, which is increasingly important in the current economy. One example is outbound ‘reminder’ dialling, used by the NHS to address problems with patients who ‘Did Not Attend’ appointments. Missed appointments cost the NHS an estimated £600 million per annum. The implementation of the Telephonetics appointment ‘reminder’ solution in one such NHS Trust generated a reduction in the ‘Did Not Attend’ rate on average by 20% over a six week period, equating to a projected £460,000 annual savings. Building on this success, the Trust is targeting a reduction in the ‘Did Not Attend’ rate by 30% which will equate to £1 million of savings per year.



Netcall has begun the integration process with Telephonetics which was acquired in July 2010, and the opportunities that lie therein are substantial. Cost savings and synergies are anticipated to be £1.5 million as forecast by analysts. Complementary product suites give rise to cross selling opportunities and organic growth potential. Analyst forecasts expect total revenues to treble to £14.1 million and profits more than double to £2.3 million in FY11 with further benefits coming through in the FY12 numbers. Furthermore, the Company maintains a debt-free balance sheet, healthy cash generation and high levels of recurring revenue. These characteristics combined with a strong management track record for acquisitions and integrations means that Netcall is poised to benefit from its role as the consolidator in a highly fragmented market.

Henrik Bang                     








£1 million savings per year



Code: AVI

Share Price: 4.75 pence

Market Cap: £10.5 million



Avisen is a highly acquisitive, London based, business and technology consultancy specialising in corporate performance management. Since coming to AIM, via a reversal in February 2009, the Company has made six successful strategic acquisitions, including that of Inca Holdings Limited (“Inca”) in August 2009.


Inca is the largest and most successful UK IBM Cognos® partner (reseller) and has gone from strength to strength since the acquisitions, providing customers with the full suite of IBM Cognos® Performance Management software as well as the support they need to integrate and manage the solution. Inca, through the use of IBM Cognos®, tackles performance management issues, such as over-complicated spreadsheets, out-of-date budgets, inaccurate forecasts and lack of version control, which all contribute to increased costs and therefore decreased profits. Additionally, Inca’s Business Intelligence (“BI”) offering ensures that the reporting process enables companies to quickly and accurately identify which areas of the organisation are in need of attention or improvement, by highlighting key trends and correlations, ultimately strengthening the performance.


Inca’s IBM Cognos® solutions focus on three key areas, BI, Planning and Consolidation. By utilising these tools businesses can create reports and understand the ‘why’ behind performance, in turn allowing them to effectively manage the business and drive its performance.


Inca’s IBM Cognos® Offering

Planning - A finance-managed solution that provides real-time visibility into resource requirements and forecasted business results.


Consolidation - Used by Finance departments to speed up the consolidation of budgets and actual data across many operating units and provide accurate corporate financial management and statutory reporting.


Business IntelligenceThis area is rapidly growing and becoming particularly influential. It allows key information to be delivered quickly and directly to the desktops of key decision makers within an organisation (not necessarily the finance department). This enables companies to quickly and accurately identify which areas of the business are in need of attention or improvement, by highlighting key trends and correlations.


Performance Management is an increasingly significant part of any modern day business and Inca’s growth  has significantly contributed to the 250% increase in Avisen’s overall revenues, which stood at £6,054,000 for the six months to 31 July 2010 (6 months 2009: £1,726,000).


Inca has seen a significant year on year growth in its software generated revenue since 2007. This growth has been driven predominantly by mid-market organisations seeking more efficient, cost effective performance. Furthermore, growth in the market has been assisted by the ease of availability for mid-market solutions, which are now more affordable than solutions used by the larger entities. As the demand for Performance Management solutions increases within the mid-market, vendors, such as IBM, have reacted by offering a more specific, tailored solution. Inca now offers the recently launched IBM Cognos® Express, a specifically manufactured Performance Management solution for the midsize market.  


Inca is generating between 15 to 20 new clients  per month, spanning an array of sectors, the majority of which are medium sized organisations that wish to plan and budget better by optimising BI in order to increase performance.


Inca’s revenue growth and success can not only be attributed to sales of software, but to its ability to cross sell packaged intellectual property with consultancy and advisory services from Avisen (the parent Company). Although Avisen and its subsidiaries, Inca in particular, are growing rapidly, the Company is always looking to the future for additional revenue streams. Business Analytics, the art of analysing business process to predict future performance, is seen as the next growth area and is a key focus for Avisen moving forward.       

Marcus Hanke CEO              




















generating 15 to 20m

new clients per month


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