Summing Up Our 3 Beautiful Businesses

Summing Up Our 3 Beautiful Businesses - BQT Access Control Solutions.

Let's start with a look back on the smallest of the three business BQT. We will start here because this is the business we are hoping to provide the the next leg up with the $5 mill a year lock contract. Hopefully this post might help a few assess the chances of this deal coming off.

But first , according to the 2019 Annual Report BQT generated a loss of $540,000 on revenue of $4.2 million.......these figures are provided at the bottom of this post. And the truth is that growth in revenue has been stagnate for some time.

Looking back we can see that the BQT division is basically doing almost exactly the same run rate in 2019 as it did in the (ex-MSP before Merger) 2017 Dec Half Yearly. I will now explain why listing these numbers are important.






Looking at the this old break down helps us understand the geographical segments of the BQT business...

This table clearly demonstrated that the weakest geographical segment was North America, generating only $24,888 in revenue... this sorry result for the region would soon become the new focus of BQT Management.

Sometimes when the company makes an announcement we can overlook the significance of the contract if the numbers released are small. In March 2018 BQT announced that they signed a new distribution agreement with a new Australian and New Zealand distributor with initial orders of around $150,000.

The announcement (link here) of this contract which I suggest you all read turned out to be what I believe to be the seed of the $5 million a year lock contract deal. This is definitely a case of blink and you will miss it. As was the paragraph in the 2019 Annual Report.

Common name here is Dormakaba. Remember that 16,000 employee $2 billion plus global outfit.

Timeline

* March 2018 Australia and New Zealand contract signed for "co branded products " (meaning one of the top three lock companies in the world wants to put their name on our product).
* 2018 - Orca lock is presented at ISC West and wins award
* January 2019 - BQT news post from Auckland announces the Orca launch
* 2019 Annual Report states that the during FY2019, BQT signed a distribution agreement with dormakaba Canada to supply the newly released YG80 lock into the North American, Canadian and Mexican markets. Clearly the original Australian New Zealand distribution agreement is expanded from the tiny ANZ market to now North America
* September 2019 - Ava discusses the Auckland production and manufacturing facility...
* October 2019 - Discussion with Scott Basham - I asked him about production/manufacturing expansion - he said "all the planning and briefing of stake holders of the ramp up is done"

All of these points suggests to me that $5 mill a year contract deal is more a probability than a possibility.

BQT HEADED FOR PROFITABILITY IN 2020
Coming back 2019 Annual figures for BQT and that $540,000 loss and $4 mill revenue. A number of initiatives have been undertaken to get BQT to profitability regardless of the $5 mill a year contract deal. I understand that a number redundancies have been made, over sized offices have been ditched and their leases have been replaced with cheaper smaller sized offices all part of $1 MILLION COST STRIP OUT ACCROSS BQT alone.............

So this time in 2021 when we are looking at BQT figures we could be seeing revenues exceeding $10 million, North American sales blowing all the other regions out of the water (REMEMBER THIS IS A BRAND NEW MARKET / BRAND NEW CUSTOMERS ) , costs as a % way down, Gross Profit way way higher and more than likely a pretty tidy profitable and EBITDA......

I think any business owner would rate themselves highly if they were to double revenue and chunky profitability over the course of 18 months.