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Don't be put off by recent share price weakness; the fundamental investment case remains attractive
Thursday 29 Mar 2018 Author: Daniel Coatsworth

Quixant (QXT:AIM) 410p

Loss to date: -6.3%

Original entry point: Buy at 437.5p, 25 January 2018

Full results from the gaming machine platform supplier beat expectations on multiple levels. Stockbroker FinnCap had forecast $108.8m revenue, $17.3m pre-tax profit and 2.4p dividend per share. Quixant managed to produce $109.2m revenue, $17.7m pre-tax profit and 2.6p dividend per share.

FinnCap says cash generation was slightly weakened by increased inventory to counter growing worldwide demand for electronic components and to avoid price rises.

Quixant now accounts for more than 10% of market activity, having shipped 52,000 gaming platforms in 2017. FinnCap also notes Quixant is now becoming recognised for monitor quality, independently of its platforms.

‘Button decks (touch screen monitors replacing the smash buttons) are a typical example of Quixant’s ability to take a simple well-known industry product and innovate it to enhance quality and its ability to attract players, thereby enhancing value to the customer and price and margin for Quixant.’

The stockbroker has increased its 2018 pre-tax profit forecast by 6% to $19.4m. It expects the business to make $21.9m pre-tax profit in 2019.


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