19th Feb 2014 11:57
LONDON (Alliance News) - Anite PLC Wednesday said that it still expects that trading in the second half of its financial year tom improve on the first half, even though trading in its traditionally quiet third quarter continued the trends it saw in the first half.
In a management statement, the company said that overall, trading had been in line with its expectations since November 1, but it said it would need another strong fourth quarter in its Handset Testing unit if it's going to achieve its full-year expectations.
In its first half results in December Anite said that it had seen slow order intake in its Handset Testing segment, as many of Anite's key customers were involved in consolidation and re-organisation activities which delayed investment decisions ahead of the roll-out of 4G wireless technology.
Anite said Wednesday that Handset Testing revenue was in line with the previous year, as adjusted operating profit was hit by the additional overheads that came with its acquisition of Elektrobit Corp.'s Propsim portfolio in January 2013.
Anite said that the final quarter was important for the Handset Testing business, as it would need to deliver a strong performance similar to the previous year in order to meet expectations, although it is bolstered by a strong pipeline of opportunities.
The company's Network Testing and Travel segments saw strong third quarters in line with expectations, Anite said, and are on track to achieve their full year targets.
In a separate statement Wednesday, Anite said that it had expanded its partnership with an unnamed Chinese mobile operator, having been selected to supply additional device testing systems for the operator's 4G device acceptance programmes. The two companies have collaborated for several years, Anite said.
Anite provided no financial details of the agreement, but noted that it would not materially benefit its expectations for the current year, although it would benefit the business over the next few years.
Analysts at Jefferies said that Anite's results depended heavily on its fourth quarter. "The late dash for licence revenue is a fact of life for Anite, particularly in its Handset Testing business," the analysts said in a note to clients.
Jefferies expects revenues to decline 6.0% for the full year, with Handset Testing down 13%. It expects revenues in Network Testing to rise 8%, and Travel to be up 5%.
However, Jefferies expressed cautious optimism over Anite's extended agreement in China. "China is expected to be the largest 4G market globally, with over 400 million 4G subscribers by 2017" Jefferies said. "China Mobile is just getting going, but visibility into the full year 2014 earnings outturn remains limited, which investors need to bear in mind."
Jefferies maintained its 'Buy' rating for Anite.
Shares in Anite were trading up 1.0% at 86.88 pence Wednesday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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