AIM:SPSC

Stock Analysis Report

Executive Summary

Spectra Systems Corporation invents, develops, and sells integrated optical systems in the United States, Europe, and internationally.


Snowflake Analysis

Flawless balance sheet with reasonable growth potential.


Similar Companies

Share Price & News

How has Spectra Systems's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: SPSC has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0%

SPSC

-5.2%

GB Electronic

-5.4%

GB Market


1 Year Return

26.1%

SPSC

13.8%

GB Electronic

2.0%

GB Market

Return vs Industry: SPSC exceeded the UK Electronic industry which returned 13.8% over the past year.

Return vs Market: SPSC exceeded the UK Market which returned 2% over the past year.


Shareholder returns

SPSCIndustryMarket
7 Day0%-5.2%-5.4%
30 Day0%-3.4%-4.2%
90 Day7.4%-2.9%-2.6%
1 Year31.7%26.1%15.6%13.8%7.6%2.0%
3 Year683.7%544.4%50.6%43.7%11.4%-2.7%
5 Year1159.6%935.7%105.3%88.0%29.0%-0.6%

Price Volatility Vs. Market

How volatile is Spectra Systems's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Spectra Systems undervalued compared to its fair value and its price relative to the market?

32.6x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: SPSC (£1.45) is trading above our estimate of fair value (£1.42)

Significantly Below Fair Value: SPSC is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: SPSC is poor value based on its PE Ratio (32.6x) compared to the Electronic industry average (17.1x).

PE vs Market: SPSC is poor value based on its PE Ratio (32.6x) compared to the UK market (17.3x).


Price to Earnings Growth Ratio

PEG Ratio: SPSC is poor value based on its PEG Ratio (1.6x)


Price to Book Ratio

PB vs Industry: SPSC is overvalued based on its PB Ratio (3.5x) compared to the GB Electronic industry average (2.3x).


Next Steps

Future Growth

How is Spectra Systems forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

20.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SPSC's forecast earnings growth (20.9% per year) is above the savings rate (0.5%).

Earnings vs Market: SPSC's earnings (20.9% per year) are forecast to grow faster than the UK market (12.9% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: SPSC's revenue (5.2% per year) is forecast to grow faster than the UK market (3.8% per year).

High Growth Revenue: SPSC's revenue (5.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if SPSC's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Spectra Systems performed over the past 5 years?

52.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SPSC has high quality earnings.

Growing Profit Margin: SPSC's current net profit margins (24%) are lower than last year (32.8%).


Past Earnings Growth Analysis

Earnings Trend: SPSC has become profitable over the past 5 years, growing earnings by 52.4% per year.

Accelerating Growth: SPSC's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: SPSC had negative earnings growth (-38.3%) over the past year, making it difficult to compare to the Electronic industry average (-13.1%).


Return on Equity

High ROE: SPSC's Return on Equity (10.6%) is considered low.


Next Steps

Financial Health

How is Spectra Systems's financial position?


Financial Position Analysis

Short Term Liabilities: SPSC's short term assets ($16.4M) exceed its short term liabilities ($2.2M).

Long Term Liabilities: SPSC's short term assets ($16.4M) exceed its long term liabilities ($1.5M).


Debt to Equity History and Analysis

Debt Level: SPSC is debt free.

Reducing Debt: SPSC has not had any debt for past 5 years.

Debt Coverage: SPSC has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: SPSC has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: SPSC has a high level of physical assets or inventory.

Debt Coverage by Assets: Insufficient data to determine if SPSC's debt is covered by short term assets.


Next Steps

Dividend

What is Spectra Systems's current dividend yield, its reliability and sustainability?

3.74%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: SPSC's dividend (3.74%) is higher than the bottom 25% of dividend payers in the UK market (1.92%).

High Dividend: SPSC's dividend (3.74%) is low compared to the top 25% of dividend payers in the UK market (5.37%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, SPSC has been paying a dividend for less than 10 years.

Growing Dividend: SPSC's dividend payments have increased, but the company has only paid a dividend for 3 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (121.8%), SPSC's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

8.1yrs

Average management tenure


CEO

Nabil Lawandy 0

23.6yrs

Tenure

US$510,554

Compensation

Dr. Nabil M. Lawandy, Ph.D. is the Founder of Spectra Systems Corporation and has been its Chief Executive Officer and President since July 1996. Dr. Lawandy serves as the President, Chief Technology Offic ...


CEO Compensation Analysis

Compensation vs Market: Nabil's total compensation ($USD510.55K) is above average for companies of similar size in the UK market ($USD325.23K).

Compensation vs Earnings: Nabil's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Nabil Lawandy
Founder23.6yrsUS$510.55k4.76% $3.2m
Brian McLain
CFO & Company Secretary3.1yrsno datano data
Amer Sidhu
Managing Director of Ics Operations8.1yrsno datano data

8.1yrs

Average Tenure

Experienced Management: SPSC's management team is seasoned and experienced (8.1 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Nabil Lawandy
Founder23.6yrsUS$510.55k4.76% $3.2m
Donald Stanford
Non-Executive Director0yrsUS$27.00kno data
Clive Hohberger
Member of Technology Advisory Board0yrsno datano data
Brian Wilson
Member of Technology Advisory Board0yrsno datano data
Joseph Calo
Chairman of Technology Advisory Board0yrsno datano data
H. Geysen
Member of Technology Advisory Board0yrsno datano data
Shaoul Ezekiel
Member of Technology Advisory Board0yrsno datano data
Harold Fetterman
Member of Technology Advisory Board0yrsno datano data
Buddie Penn
Non-Executive Chairman8.7yrsUS$27.00k0.065% $43.5k
Martin Jaskel
Non-Executive Director13.1yrsUS$27.00k0.16% $104.2k

13.1yrs

Average Tenure

73yo

Average Age

Experienced Board: SPSC's board of directors are seasoned and experienced ( 13.1 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Spectra Systems Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Spectra Systems Corporation
  • Ticker: SPSC
  • Exchange: AIM
  • Founded: 1996
  • Industry: Electronic Equipment and Instruments
  • Sector: Tech
  • Market Cap: UK£66.479m
  • Shares outstanding: 45.85m
  • Website: https://www.spsy.com

Number of Employees


Location

  • Spectra Systems Corporation
  • 40 Westminster Street
  • 2nd Floor
  • Providence
  • Rhode Island
  • 2903
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SPSYAIM (London Stock Exchange AIM Market)COM SHS USD0.01GBGBPJul 2011
SPSCAIM (London Stock Exchange AIM Market)YesCommon StockGBGBPJul 2011
SCTQOTCPK (Pink Sheets LLC)COM SHS USD0.01USUSDJul 2011

Biography

Spectra Systems Corporation invents, develops, and sells integrated optical systems in the United States, Europe, and internationally. It operates through three segments: Authentication Systems, Secure Transactions, and Banknote Cleaning. The company’s products include a system of taggant materials and sensor equipment to authenticate banknotes that are used by central banks, as well as a G7 country for passport security; and hardware and software systems include high-speed currency authentication sensors. It also develops quality control equipment for use in paper and polymer banknote manufacturing and printing; and solutions to authenticate brand name products. In addition, the company offers banknote cleaning solution that lifts sebum and other substances from the banknote using a dry process based on supercritical CO2 cleaning; real-time auditing, fraud control, and risk management systems to government sanctioned gaming operators; and software tools for the lottery and gaming industries, fraud and money laundering, and match fixing detection, as well as for statistical analysis. Further, it develops, markets, and sells customized authentication solutions designed to enhance the security of documents and branded products. Spectra Systems Corporation sells its integrated solutions for various markets, such as currency manufacturing and cleaning, branded products, industrial logistics, and other highly sensitive documents. The company was formerly known as Spectra Science Corporation and changed its name to Spectra Systems Corporation in June 2001. Spectra Systems Corporation was founded in 1996 and is headquartered in Providence, Rhode Island. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/26 22:40
End of Day Share Price2020/02/26 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.