Amino Technologies has delivered the small half-year profit it promised last month and is improving margins and generating cash. The company has just bagged a contract in eastern Europe, too, and with its new Intel-powered media gateway product out at the end of the year, this undervalued set-top box maker should do well.
Strip out the impact of last year's blockbuster Telecom Italia order and underlying revenue grew 12 per cent - a doubling of sales in the Netherlands and £1.3m of follow-on orders from the Italians offsetting stagnation in Russia. And, crucially, gross profit grew almost a fifth to £7.1m - a tight grip on costs and skilfully avoiding supply chain issues shifted gross margin up 200 basis points to 35.4 per cent.
Moreover, customers in western Europe and North America are coming back for more and talks are under way in "several" potential new markets and Latin America. The new deal to ship cheaper, lower-spec HD boxes to Serbia and Bosnia will chip in during the second half, too. Admittedly, lumpy orders for older generation over-the-top (OTT) products are unlikely as buyers await Amino's new Intel-powered box. Still, bosses are convinced they'll hit profit targets for the year.
Broker finnCap expects adjusted pre-tax profit of £2.8m for the full year, giving adjusted EPS of 5.3p (from £1.8m and 3.3p in 2011).
AMINO TECHNOLOGIES (AMO) | ||||
|---|---|---|---|---|
| ORD PRICE: | 51.5p | MARKET VALUE: | £28.3m | |
| TOUCH: | 50-53p | 12-MONTH HIGH: | 60p | Low: 38.5p |
| DIVIDEND YIELD: | 3.9% | PE RATIO: | 79 | |
| NET ASSET VALUE: | 36p* | NET CASH: | £13.9m | |
| Half-year to 31 May | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 24.7 | -0.42 | -0.70 | nil |
| 2012 | 20.1 | 0.21 | 0.34 | nil |
| % change | -18 | - | - | - |
*Includes intangible assets of £4.2m, or 8p a share | ||||
