30th Apr 2018 11:22
LONDON (Alliance News) - Telit Communications PLC on Monday swung to a annual pretax loss due to rising research costs and restructuring charges, and said that it looks forward to a good 2018 after a "strong" first quarter performance.
In 2017, the internet of things enablement firm recorded a pretax loss of USD56.8 million, compared with pretax profit of USD17.9 million the year prior. Revenue grew modestly to USD374.5 million from USD370.3 million the year before.
Profit performance was hurt by a sharp rise in research and development expenses as well as exceptional charges.
Research and development costs rose to USD66.9 million from USD38.3 million the year prior. Exceptional charges rose to USD21.4 million from USD780,000 the year prior. This was primarily due to USD16.0 million of restructuring expenses in the year compared to nothing the year prior.
Telit will not pay a dividend in 2017, compared to a 7.4 US cents dividend paid in 2016.
"2017 was a very challenging year for Telit - declining revenues and margins in our module business, together with slower than expected growth in our IoT services business and a sharp increase in operating expenses, resulted in poor financial performance," Telit Chief Executive Officer Yosi Fait said.
"With a strong first quarter," Fait added, "I believe that the double-digit growth planned for 2018, together with stabilisation of our gross margins, and cost optimisation we are implementing, should bring a better financial performance and improve our cash flow generation."
In late March, Telit said the UK Financial Conduct Authority has begun an investigation into the timing of some of its announcements. The investigation is looking into "the timeliness of announcing certain matters included in interim results", which were published last August.
Shares in Telit were 4.4% higher at 162.50 pence on Monday.
Related Shares:
TCM.L