Monday, 9 December 2013

Anite interims

Anite plc

Anite is a global provider of hardware and software solutions, systems integration and managed services within its core markets of Wireless and Travel. I have a holding in my growth portfolio (epic code: AIE).


Anite released their interim results today and were in line with the trading update in October, commented on here.

Group revenue fell by 6% to £57.5m due to a 21% reduction in Handset Testing revenue.  Like-for-like revenue declined by 17% for the group due to a 33% decline in Handset Testing if we exclude the Propism acquisition.

With the Handset Testing just breaking even in the period the Group adjusted operating profit declining 63% to £5.3m. 

Adjusted profit before tax was £5.1m down from £14.3m last year and adjusted diluted EPS reduced 65% to 1.2p and statutory diluted EPS reduced from 27p to 0.2p.

Despite the lower earnings, free cash flow (FCF) was £3.8m compared to £3.5m last year.  The FCF generated was spent on - acquisitions £1.8m, dividends £3.6m and purchase of own shares for an employee trust £3.4m, resulting in net debt of £6m compared to £0.9m at the start of the year.

The interim dividend has been maintained at 0.575p as management state that "...despite the reduction in year on year profitability... the Board believes that trading in the first half of the year reflected temporary market conditions..."

Looking at sales and orders in more detail, there was some positive news as can be seem from the table below and with the book to bill ratio above 1 for the Handset Testing division this possibly marks a turning point in its fortunes.

Click on table to enlarge


Management believe that with a tenfold increase in mobile traffic between 2013 and 2019 (see Ericsson mobility report here) there will be no let-up in cellular network overload and this will drive the need for continued technology innovation in handsets and therefore the testing that they require from the Handset Testing division.

Mangement expect that the roll-out of LTE 4G networks will continue to benefit the Network Testing business in the second half and over the next few years.

The Travel business has a £75.2m order book and this is expected to be mined over the next 5-10 years.  The long term prospects for continued growth will be dependent on the ability to land new and renew existing maintenance contracts.

My expectations for the full year are unchanged from my previous estimates here that produced full year underlying EPS of 4.9p.  


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