Join our community of smart investors

Quixant takes "prudent view" of sales

The group has lifted its full-year dividend by 19 per cent
March 25, 2019

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.

IC TIP: Hold at 308p

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:308pMARKET VALUE:£204m
TOUCH:300-315p12-MONTH HIGH:495pLOW: 275p
DIVIDEND YIELD:1%PE RATIO:19
NET ASSET VALUE:90ȼ*NET CASH:$9.7m
Year to 31 DecTurnover ($m)Pre-tax profit ($m)Earnings per share (ȼ)Dividend per share (p)
201431.97.19.51.2
201541.87.89.91.5
201690.411.714.32.0
201710915.020.02.6
201811514.321.43.1
% 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