In January 2019, Quixant’s (QXT) market value plunged on news that revenues and adjusted pre-tax profits for 2018 would come in “slightly lower” than market expectations. This shortfall largely came from the group’s gaming monitors segment, where it has been culling lower-margin business.
In the event, Quixant – which provides computing platforms and monitors for gaming machines – successfully lifted its overall gross margin from 34 per cent to 35 per cent, despite pressures around component pricing and lead times.
The principal gaming business saw a 9.1 per cent rise in revenues to $77.6m (£58.7m) – stemming from a 7.3 per cent decline in gaming monitors sales to $15.1m, and 14.1 per cent growth in its other division, gaming platforms.
The latter improvement came despite softer-than-expected demand for gaming platforms during the year. Market conditions have “normalised” in 2019 – but demand among some customers is now expected to be “more second-half weighted”. As such, Quixant is taking a “modestly more prudent view” of anticipated full-year sales, although its “flexible cost model” should limit the effect on profits.
House broker FinnCap had previously estimated revenues of $125m for 2019, but now expects $119m. It expects adjusted pre-tax profits of $20m and EPS of 26.7ȼ, against $18.2m and 26.3ȼ in 2018.
QUIXANT (QXT) | ||||
ORD PRICE: | 308p | MARKET VALUE: | £204m | |
TOUCH: | 300-315p | 12-MONTH HIGH: | 495p | LOW: 275p |
DIVIDEND YIELD: | 1% | PE RATIO: | 19 | |
NET ASSET VALUE: | 90ȼ* | NET CASH: | $9.7m |
Year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (ȼ) | Dividend per share (p) |
2014 | 31.9 | 7.1 | 9.5 | 1.2 |
2015 | 41.8 | 7.8 | 9.9 | 1.5 |
2016 | 90.4 | 11.7 | 14.3 | 2.0 |
2017 | 109 | 15.0 | 20.0 | 2.6 |
2018 | 115 | 14.3 | 21.4 | 3.1 |
% change | +5 | -5 | +7 | +19 |
Ex-div: | 18 Apr | |||
Payment: | 10 May | |||
*Includes intangible assets of $15.5m, or 23ȼ a share £1=$1.32 |