Surging demand for data-hungry devices has heaped pressure on mobile operators and handset manufacturers to maximise their capacity and ensure their products work. Given that many rely on Anite (AIE) to test their technologies, it may come as a surprise that the company's operating profit dropped 58 per cent last year.
The decline primarily reflects a "horrible" first half in which handset manufacturers such as Nokia and Blackberry ceased testing activities due to consolidation, says chief executive Christopher Humphrey. Organic sales in its handset division fell a third during the first six months. However, Mr Humphrey has seen "progressive improvements" since then, and expects a rebound this year.
Anite's smaller network-testing division proved less volatile, growing sales by 22 per cent to £32m. The segment benefited from mobile operators shifting to higher-speed '4G' network technology, which requires additional testing. Anite also completed the £45m sale of its travel software division - the last of nearly a dozen legacy businesses that didn't fit with its focus on the international wireless market. It also strengthened its end-of-year order book by 14 per cent to £30.9m.
After stripping out the travel division, broker Panmure Gordon expects adjusted pre-tax profits of £21.8m and adjusted EPS of 5.3p this year, up from £20.4m and 4.1p.
| ANITE (AIE) | ||||
|---|---|---|---|---|
| ORD PRICE: | 93p | MARKET VALUE: | £278m | |
| TOUCH: | 92-93p | 12-MONTH HIGH: | 143p | LOW: 73p |
| DIVIDEND YIELD: | 2.0% | PE RATIO: | 34 | |
| NET ASSET VALUE: | 37p* | NET CASH: | £6.1m | |
| Year to 30 Apr | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 79 | -4.0 | -1.5 | 0.95 |
| 2011 | 94 | 12.2 | 3.1 | 1.05 |
| 2012 | 123 | 22.2 | 5.7 | 1.50 |
| 2013 (restated) | 113 | 22.1 | 5.5 | 1.84 |
| 2014 | 109 | 8.9 | 2.7 | 1.84 |
| % change | -3 | -60 | -51 | - |
Ex-div: 1 Oct Payment: 28 Oct *Includes intangible assets of £88.5m, or 29p a share | ||||
