First-half results from Anite (AIE) were bad, but thankfully, no worse than flagged in October's profit warning. And chief executive Christopher Humphrey remains resolute in his belief that "the second half will be significantly better than the first", benefiting from the usual seasonal second-half bias and broad recovery in the handset testing business. Recent trading has been encouraging, he says, and long-term growth drivers remain intact.
Industry consolidation in the handset market meant revenues at the key handset testing division slumped by 21 per cent to £31.8m, wiping out almost all the division's profit. When Microsoft bought Nokia's mobile handset business in September, both companies temporarily put device testing on hold, while Canada's Blackberry put itself up for sale and largely stopped testing activities. This was partially offset by ongoing improvements at the smaller network testing division, where underlying operating profit jumped 27 per cent to £3.2m. The travel sector software unit grew fast, too, a low fixed cost base turning a 13 per cent rise in sales into 53 per cent growth in profit to £2.6m.
Broker Jefferies left its estimates unchanged following a major downgrade in October. It expects full-year adjusted pre-tax profit of £19.6m, giving adjusted EPS of 5.02p (from £34.3m and 8.29p in 2013).
ANITE (AIE) | ||||
|---|---|---|---|---|
| ORD PRICE: | 92p | MARKET VALUE: | £277m | |
| TOUCH: | 91-92p | 12-MONTH HIGH: | 163p | LOW: 73p |
| DIVIDEND YIELD: | 2.0% | PE RATIO: | 22 | |
| NET ASSET VALUE: | 34p* | NET DEBT: | 6% | |
| Half-year to 31 Oct | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 61.2 | 11.3 | 2.90 | 0.58 |
| 2013 | 57.5 | 1.55 | 0.20 | 0.58 |
| % change | -6 | -86 | -93 | - |
Ex-div: 29 Jan Payment: 14 Feb *Includes intangible assets of £99.8m, or 33p a share | ||||
