Consolidation among handset manufacturers and mobile operators dampened first-half demand for Anite's (AIE) network and device testing services. Although the group posted an operating profit of about £1m, its performance was flattered by last year's difficult trading.
Anite's customer base has shrunk due to Microsoft's purchase of Nokia, Lenovo's acquisition of Motorola and the withdrawal of manufacturers such as Broadcom and Ericsson from the wireless modem market. That was partially offset by strong growth in Asia Pacific, but total order intake fell 5 per cent to about £49m.
Nonetheless, once currency shifts and acquisitions are stripped out, sales rose 8 and 4 per cent respectively at Anite's handset and network testing divisions. Moreover, cost-cutting enabled the former to widen its operating margin from 1 to 9 per cent even as it increased orders by a fifth (excluding several large renewal contracts secured last year). Network testing fared worse, as hefty product investment reduced adjusted operating profit by 13 per cent.
The group is also chasing growth through acquisitions. The disposal of its travel software business gave it the firepower to buy Xceed Technologies, significantly enhancing its data analytics capabilities.
Broker Investec forecasts full-year pre-tax profits of £22.8m, giving EPS of 5.8p, up from £14.9m and 3.9p in 2013-14.
| ANITE (AIE) | ||||
|---|---|---|---|---|
| ORD PRICE: | 76p | MARKET VALUE: | £227m | |
| TOUCH: | 75-76p | 12-MONTH HIGH: | 110p | LOW: 69p |
| DIVIDEND YIELD: | 2.5% | PE RATIO: | 22 | |
| NET ASSET VALUE: | 46p* | NET CASH: | £29.8m | |
| Half-year to 31 Oct | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 47.4 | -0.9 | -0.5 | 0.58 |
| 2014 | 49.0 | 1.0 | 0.2 | 0.63 |
| % change | +3 | - | - | +10 |
Ex-div: 29 Jan Payment: 13 Feb *Includes intangible assets of £111m, or 37p a share | ||||
