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Amino Technologies boosts top line

North- and Latin American markets drive sales growth
July 11, 2017

Management at Amino Technologies (AMO) noted the increasing popularity of the ‘TV everywhere’ proposition, as the company reported double-digit revenue growth and strong cash generation for the first half of 2017. This, on top of an improved gross margin, driven by sales of mature products and the launch of the new ‘Enable’ solution, led Amino’s shares to rise 3 per cent in early trading.

Based in Cambridge, Aim-listed Amino specialises in providing digital TV entertainment solutions via internet protocol (IP)TV and set-top-box devices. Amino’s top line benefited from sterling’s Brexit-led decline, as around 95 per cent of its sales and associated costs were transacted in US dollars during the period – although growth was still up 4 per cent on a constant currency basis. North America, Amino’s largest market, saw good sales growth of 38 per cent – driven in part by the launch of Amino’s ‘Enable’ virtual set-top-box software, which allows operators to transform ‘legacy devices’ already sitting in users’ homes. Latin America boosted revenues by a whopping 196 per cent as regulatory changes created opportunities in the region.

IC TIP: Buy at 194p

Europe stuck out with a significant sales decline of 48 per cent; for management, though, this was not unexpected. A key customer – confirmed as Vodafone Netherlands – was acquired by T-Mobile, and a hiatus ensued. However, good traction is expected to resume with this customer in the future. Meanwhile, Amino continued to progress its first “full end-to-end multiscreen entertainment service” to Delta, another Netherlands-based operator.

Analysts at finnCap forecast adjusted profits of £10.9m for the financial year to November 2017 and EPS of 13.7p, with £11.8m and EPS of 14.7p the following year, against £10.2m and 13.5p for 2016.

AMINO TECHNOLOGIES (AMO)  
ORD PRICE:194pMARKET VALUE:£139m
TOUCH:193-195p12-MONTH HIGH:220pLOW: 112p
DIVIDEND YIELD:3.2%PE RATIO:17
NET ASSET VALUE:67p*NET CASH:

£13.1m

Half-year to 31 MayTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201633.0-0.5-0.81.39
201739.94.86.51.53
% change+21--+10
Ex-div:10 Aug   
Payment:01 Sep   
*Includes intangible assets of £46.2m, or 64p a share