21st Aug 2024 11:01
(Alliance News) - MTI Wireless Edge Ltd on Wednesday said its seeing "strong demand" for its 5G military antennas, and it increased the size of its share buyback in response to positive interim results.
The Israel-based communication and radio frequency technology company said the conflict in Gaza has hurt domestic revenue for its Water Control & Management division, but orders from the global defence sector has supported its Antenna division.
Pretax profit was USD2.3 million in the six months that ended June 30, up 10% from USD2.1 million a year before, on steady revenue of USD22.3 million.
Sales in the Antenna division rose by 16%, driven by the military orders, while Water division sales were down 11%.
"Not surprisingly, defence spending has risen across the world following the outbreak of multiple conflicts," MTI said. "Orders for military antennas, while critical to all defence operations, tend to lag behind orders for other types of military equipment."
For the Water business, in addition to the reduced activity in Israel, European and North America markets had a slow start to 2024, though recently orders have improved, MTI said.
The Water division provides wireless control systems under the Mottech brand that manage irrigation and water distribution for agriculture, municipal authorities and commercial operators. The systems reduce water and power usage.
Looking ahead, MTI said trading in the third quarter so far has been positive. "We are hopeful of securing some material contracts in the second half of the year," it said. "Overall, the business is well placed with good visibility on potential future contracts which will support the prospects for the business into 2025 and beyond."
Chief Executive Officer Moni Borovitz commented: "Not surprisingly, the conflict in Israel is having some impact on local market revenues although we did experience better deal flow in July and hopefully we will see the end to this conflict soon."
On the back of that confidence, MTI on Wednesday said it will increase the size of its current share buyback programme to GBP1.0 million from GBP700,000. The programme, being run by Shore Capital, is still planned to complete by March next year. Rather than being cancelled, the repurchased shares will be held in treasury and eventually resold, with the cash from these re-sales used to fund future share buybacks.
MTI additionally paid a 3.1 US cents cash dividend back in April.
MTI shares were up 8.8% to 40.25 pence in London on Wednesday morning.
By Tom Waite, Alliance News editor
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