The JSE will welcome Poynting Antennas (Poynting) to the Alternative Exchange (AltX) on Wednesday, 9 July. Poynting is a wireless telecommunications company specialising in the design and manufacture of antennas. These antennas can be used, for example, to improve reception on cellular phones and improve wireless internet connectivity. The antennas can also be used in tracking devices to locate vehicles.
Approximately 50% of Poynting’s revenue is generated from commercial exports. A portion of the exports are to the international defence industry as Poynting’s antennas can also be used to find direction, locate soldiers, locate military vehicles and other military devices. Poynting’s customer base includes MTN, Vodacom, iBurst, Armscor, Matrix and Tracker to name but a few household names.
The company’s management team is not deterred by the current market conditions which have stalled the listing of several companies this year. They are confident in their decision to list on AltX at this time, as initial investor feedback has been very positive.
“Our industry is thriving at the moment, listing now will enable us to take advantage of significant business opportunities in the growing wireless telecommunications market both locally and internationally,” says Andre Fourie, CEO of Poynting.
The company was established and developed by previous Wits University professors who are world authorities on antenna design. Poynting has the skills and resources to create unique Intellectual Property (IP). It has registered a number of patents and designs, with its major IP residing in a range of more than 200 products, designed and manufactured in-house and in China.
The smallest antennas Poynting manufactures are used in cellular tracking applications and retails for approximately R15.00 and antennas manufactured for the defence industry can be as large as 10m in size and cost approximately R1m per unit. In 2007 Poynting sold over 350 000 commercial antennas.
South Africa ranks 23rd in telecommunications development in the world with voice communications penetration exceeding 90% and broadband internet connections penetration at approximately 1% (and growing at 50% per annum). Wireless broadband internet connections using EDGE, 3G, HSDPA and iBurst technologies have overtaken wired connections (via ADSL) in 2007.
The wireless technology market is experiencing dramatic growth with the cost, size and power requirements of wireless functions falling rapidly. The success of mobile phones is fuelling the rise of wireless communications, promoting innovation and bringing down prices.
The worldwide wireless technology market is estimated to have been $25-billion in 2007 and is experiencing dramatic growth. The market is set to become even more populated with service providers and wireless broadband technologies in South Africa in the medium-term.
The worldwide WiFi market is estimated to reach $5,6-billion in revenue by 2012. 3G market driving- forces are likely to be high data speed with mobile internet access, mobility, multimedia facilities, and videoconferencing, amongst others. A very large adoption of such WiFi devices is predicted in Asia Pacific and Europe, where Poynting is currently active, as well as the USA where Poynting intends to create further sales channels, strengthening its international presence.
After selling mainly to smaller international customers, Poynting has now formed business relationships with some very large international wireless manufacturers and this business will partially contribute to FY2009 revenues and more visibly in the FY2010.
The listing will facilitate Poynting’s growth strategy and assist the company to: raise funds to finance the anticipated growth in working capital required to meet the needs of the buoyant markets within which the company operates; fund future growth which requires the development of new and the expansion of existing sales channels; fund the development of new products; allow for additional investment in research and development infrastructure; increase production capacity; enhance Poynting’s company profile and increase its brand recognition.
Poynting’s Revenue for the year ending June 2007 was R44-million. Forecast Revenue for the years ending June 2008 and 2009 are R58-million and R102-million respectively. The company’s forward PE to June 2009 is 4.7 to 5.8