Lo-Q shares up on news of MasterCard collaboration

Shares in Lo-Q (LON:LOQ) were up over 5 per cent in mid-morning trade after the provider of virtual queuing systems for theme parks unveiled a collaboration agreement with MasterCard.

At 11.15am, the shares were trading 9.5 pence higher at 196 pence.

In the year to date it has been anything but a roller coaster ride for investors as the company has doubled in size to £33.6 million.

The momentum has been created by a series of good news announcements, including today’s and another last month which saw it renew and expand its deal with American parks operator Six Flags.

Under the terms of the memorandum of understanding with MasterCard the pair will jointly create a new contactless payment device that combines the card giant’s PayPass payments technology with Lo-Q's software.

Once developed, they will then promote the combined product to theme parks, water parks and other attractions.

Lo-Q chief executive Tom Burnet said: "This really is an exciting partnership for all concerned. 

“Lo-Q's queuing solutions are highly sophisticated and routinely trusted by some of the world's largest, most demanding attractions operators. 

“Visitors like our products and they get much more from their days out by leaving the queues behind and focusing solely on having fun. 

“By combining these qualities with the world-class payment technologies and reach offered by MasterCard means that we can now work together to create new and exciting growth opportunities for both our firms."

Lo-Q’s flagship offering is the Q-bot, a handheld device that allows theme park visitors to queue virtually. After making a reservation with a Q-bot unit, the system registers that person or group into a virtual queue.

Guests are informed via the Q-bot’s display, and with a beep and vibration, that their ride is ready, while the device can also inform users of a ride’s breakdown and allow rescheduling of reservations.

The advantage of Q-bot is that it enables theme park visitors to reserve their rides without having to queue, so a visitor does not have to spend their time waiting in a line and he or she can spend time enjoying other attractions or do something else at the park, such as go to a restaurant.

A wristband product for water park visitors and a smart phone app can also provide a similar service Lo-Q operates primarily on a revenue share basis with its clients, thus sales are hugely skewed towards the summer but the vast majority of deals are actually signed over the winter off-season.

On November 21 the group received a double dose of good news from park operator Six Flags, its largest customer.

Lo-Q’s deal to supply Q-bot handheld devices, which was due to expire at the end of next year, has now been extended to end of 2017. It is currently used at 11 sites. 

Additionally the trial of wristband system trialled at White Water Atlanta will be rolled out to seven other water parks as quickly as possible, Lo-Q revealed.

Separately, a three-month smartphone-based trial for the EDF London Eye is also underway.

“The agreement with Six Flags extends its existing agreement (covering 11 sites) by five years to 2017 and also extends the scope to cover eight water park sites for the Q-band solution,” said Richard Jeans, an analyst at Edison Investment Research.

“The trial with the London Eye is unlikely to be material financially, but we understand that interest in the product is healthy and broader uptake could add incremental revenue streams, diversify customer exposure and reduce seasonality.”