www.telit.com
Telit Communications PLC is a global leader in the field of machine-to-machine (m2m) communications. Telit develops, manufactures, markets and sells communication modules which enable machines, devices and vehicles to communicate via cellular and other wireless networks. Telit's core strengths are innovative products, compete control over its intellectual property and its flexible, customized solutions, which enable it to offer customers the lowest total cost of ownership and a future-proof product roadmap. Telit's products are sold and deployed worldwide through offices in the US, China, Korea, Taiwan, Denmark, Germany, Great Britain, Italy, Spain, Turkey, Israel, Brazil, and the Republic of South Africa.
Machine-to-machine (m2m) technology established wireless communication between machines and the information centre of a business.The goal of m2m is to enable applications that allow businesses to increase productivity and competitiveness. At the heart of each m2m implementation is a communication module which receives, processes and transmits information via wireless networks.
Telit Communications says it has emerged from a challenging 2009 much stronger
In its full-year results statement, Telit Communications (AIM: TCM) said it has emerged from 2009 as a much stronger company. In the year ended 31 December 2009, the machine-to-machine (M2M) communication specialist reported revenues of €63.8m, up 10.7% compared with €57.6m in the previous year and gross profit grew by 11% to €30.6m.
Telit noted that 2009 had been a challenging year for the general global economy and the M2M industry in particular. “Despite the difficulties, Telit continued its acquisition of market share and trend of year-on-year revenue growth, albeit at a slower pace than in previous years but with the pace picking up in H2-2009”, Telit Chief Executive Oozi Cats said.
For the twelve months, Telit reported a €2.9m loss before tax, compared to a €1.2m profit in the previous year. In addition to its ongoing investment into R&D, the company also incurred costs of €2.75m, in connection with the transfer of manufacturing to its new Chinese partner. According to Telit, the investment facilitates its goal of decreasing manufacturing costs and it believes that the long term return on this investment will be substantial, cementing Telit's position in the m2m market.
Throughout the year, the company said it has been focused on continuing revenue growth, whilst trying to minimise operating costs. Telit reported ‘Sales & Marketing’ and ‘General & Administrative’ costs of €11.1m and €8.1m respectively, representing a reduction as a percentage of revenues. However Research & Development expenses were €10.9m compared with €9.6m in the previous year.
Operationally Telit made progress during the year, notably it accelerated growth in the Americas and APAC regions, transferred manufacturing to China and agreed a number of commercial partnerships. In the automotive sector it signed agreements with Magneti Marelli and MetaSystem in Italy, and with Positron of Brazil.
Furthermore, Telit also entered into a strategic collaboration with Deutsche Telekom and T-Mobile, which sees the three companies working closely together to jointly develop innovative M2M products and services in the future.
Additionally, Telit reduced its debt position during the year to €7.2m from €11.9m, following the successful placings of 28m shares in August and December 2009, which raised a gross consideration of £5.7 million.
Going forward, the company said that its future looks promising through the rest of 2010 and beyond.
Following the heavy investments made during the year, Telit believes its is well positioned to take advantage of the opportunities ahead. Moreover the company is confident in its ability to maintain and enhance its market position, as we did in 2009 and it looks forward to continue business expansion.
“We successfully transferred our production to China in order to increase efficiency and are confident in our ability to continue our leading performance in the m2m industry and increase our rate of growth in 2010”, Cats concluded.
In response to the figures, London-based stockbroker Astaire Securities said the results were comfortably ahead of its expectations and noted that Telit continued to demonstrate growth whilst the global market has contracted.
According to Astaire the M2M market is expected to return to growth with initiatives across a number of industries, including smart metering and telematics, and the company is well placed to benefit with a number of design wins coming on stream. Specifically in terms of the relocation of manufacturing to China, the broker believes that Telit will benefit from an approximate 20% reduction in production costs and an increase in capacity.
