Machine-to-machine (M2M) communications specialist Telit Communications (TCM) reported accelerating top-line growth in 2013, with the fourth quarter delivering a 25 per cent increase year on year. Reported pre-tax profits almost tripled, and the underlying performance was just as strong, with operating profit up 139 per cent to $14m (£8.4m).
Growth was particularly explosive at m2mAIR, a platform Telit markets as a "one stop one shop" for M2M business. Bolstered by two acquisitions - Crossbridge in January and ILS Technology in September - m2mAIR sales jumped from $1.6m to $9.8m. In December Telit agreed to buy a third business, ATOP, which will form the cornerstone of its automotive division. ATOP allows car makers to integrate 'smart' features such as eCall, a European initiative to rescue motorists involved in collisions anywhere in the EU.
The group’s growth prospects are underpinned by the emerging 'internet of things' - the idea that homeware can be controlled through the web. The US - the largest market for such applications - now accounts for 43 per cent of Telit’s total revenues, up from 36 per cent last year. Europe, the Middle East and Africa account for 45 per cent, while Asia-Pacific brought in 11 per cent.
Broker Cannacord Genuity raised its EPS expectations by 10 per cent to 18ȼ for 2014 - up from 14ȼ in 2013.
TELIT COMMUNICATIONS (TCM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 206p | MARKET VALUE: | £227m | |
| TOUCH: | 206-209p | 12-MONTH HIGH: | 216p | LOW: 70p |
| DIVIDEND YIELD: | nil | PE RATIO: | 33 | |
| NET ASSET VALUE: | 72ȼ* | NET DEBT: | 15% | |
| Year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (ȼ) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 89 | -4.1 | -0.1 | nil |
| 2010 | 132 | 6.5 | 11.3 | nil |
| 2011 | 177 | 2.2 | 1.6 | nil |
| 2012 | 207 | 4.9 | 3.8 | nil |
| 2013 | 243 | 12.0 | 10.5 | nil |
| % change | +17 | +144 | +176 | - |
Ex-div: na Payment: na *Includes intangible assets of $49.5m, or 45ȼ a share | ||||
