As manufacturers increasingly add computing power to cars, watches and other devices, growing numbers have turned to Telit Communications (TCM) for connectivity and communication solutions. Robust demand drove the 'internet of things' specialist's operating profits up 24 per cent to $18.8m (£13.3m) in 2015. Investors celebrated by bidding shares up more than a tenth.
Strong demand for 'connected car' components fuelled a 60 per cent rise in automotive revenues. Sales also soared 30 per cent in the budding services business. That reflected the launch of IoT Portal, a tool that allows customers to manage the data, connectivity and security of their devices.
Order delays among US customers and the economic downturn in Brazil pushed sales down 5 per cent in the Americas. But revenues soared nearly three-quarters in Asia-Pacific as clients commenced mass production. Telit also won design work with utilities in the Netherlands and landed a major UK smart meter contract.
After several years of acquisitions and investments, management plans to scale up and reduce costs as a proportion of turnover. Broker Canaccord Genuity predicts annual sales will climb almost 15 per cent annually over the next three years. It expects pre-tax profits of $32.1m in 2016, giving EPS of 23¢ (FY2015: $27.7m and 21¢).
| TELIT COMMUNICATIONS (TCM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 217p | MARKET VALUE: | £249m | |
| TOUCH: | 216.5-217p | 12-MONTH HIGH: | 358p | LOW: 168p |
| DIVIDEND YIELD: | nil | PE RATIO: | 25 | |
| NET ASSET VALUE: | 96¢* | NET CASH: | $1.1m | |
| Year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2011 | 177 | 2.2 | 1.6 | nil |
| 2012 | 207 | 4.9 | 3.8 | nil |
| 2013 | 243 | 12.0 | 10.5 | nil |
| 2014 | 294 | 13.9 | 10.6 | nil |
| 2015 | 333 | 15.9 | 12.3 | nil |
| % change | +13 | +14 | +16 | - |
*Includes intangible assets of $81.9m, or 71¢ a share £1=$1.41 | ||||
