www.telit.com
Telit Wireless Solutions is a brand of Telit Communications PLC (AIM: TCM), an enabler of machine-to-machine (M2M) communications worldwide providing wireless module technology, M2M managed services and value added services, including connectivity. Exclusively dedicated to M2M with more than 12 years of experience in the market, the company constantly enhances its technology leadership with six R&D centers across the globe. Telit offers an extensive portfolio of the highest quality cellular, short-range RF, and GNSS modules, available in over 80 countries. By supplying scalable products that are interchangeable across families, technologies and generations, Telit is able to keep development costs low and protect customers' design investments. In addition, Telit is the only module provider in the market today to offer a value added services bundle including connectivity dedicated to simplifying the deployment of M2M applications.
Telit provides unmatched customer support and premier design-in expertise through its 25 sales and support offices, a global distributor network of wireless experts with more than 30 Telit-designated Competence Centers, and its online Telit Technical Support Forum.
Telit technology enables organizations to wirelessly collect, process and respond to real-time data from vending machines, utility meters, cars, remote health monitors and any other connected devices, creating new efficiencies and revenue opportunities as well as societal and personal benefits. Further information about Telit and its products can be found at www.telit.com. Join the conversation and learn more about Telit and its customers’ innovative applications on Facebook and Twitter.
Telit Communications remains a ‘buy’ after robust interims
Machine-to-machine communications technology specialist Telit Communications (LON:TCM) substantially boosted revenues and profits during the six months to the end of June, according to interim results released by the company today.
Telit reported that revenue increase by 36 per cent to US$81.1 million and a fair chunk of that increase fell to the bottom line with operating profit more than doubling to US$4.1 million (H1 2010: US$1.9 million). Pre-tax profit came in 89 per cent greater at US$2.8 million (translating to earnings per share of 2.7 cents)
The firm said that integration of the Motorola machine-to-machine (M2M) business it acquired in March this year has been “substantially completed”, strengthening its position in the market.
In July, Telit paid US$2.9 million for wireless connectivity specialist GlobalConect – a deal designed to allow Telit to offer wireless capabilities and so strengthen its proposition to its customers.
M2M communications is used in a variety of industrial and other business fields to improve productivity. For example, in remote production environments they help to reduce the need for a human being to be on site all of the time, while vehicles with M2M capability can automatically notify service centres of maintenance issues. Another good example is of vending machines that can report to central warehouses when they are running low on stock.
Commenting on today’s results, Telit chief executive Oozi Cats said: “During the period, the momentum achieved in 2010 continued and together with the successful integration of Motorola m2m, revenue growth was sustained with a positive impact on profitability. The gross margin decreased slightly due to the lower margin on the Motorola products, which we are taking steps to improve. We expect our gross margin to remain stable in the near term and we are constantly working on improving our cost base, logistics and purchasing, to achieve and maintain a higher level of profitability in the long-term.”
Telit added that the outlook for the rest of 2011 “remains positive” for the firm and that it expects to continue its robust growth. Trading has remained stable since the end of June, while Telit believes it is well positoned to benefit from key trends in the technology market and will look to use the Motorola m2m integration to further increase market share.
Meanwhile, the firm will keep an eye out for acquisition opportunities, it said.
House broker Investec Securities said that Telit’s results were in line with the firm’s July update. “Revenue of US$81.1 million compares with the expected US$81 million and profitability appears on track with a 50 per cent year-on-year EBITDA increase,” said the broker. “Outlook is ‘in line’, but we choose to reflect an element of the wider macro outlook and thereby introduce an element of caution.”
This means that Investec has reduced its estimate for Telit’s sales this year by 3.4 per cent US$192.8 million. The broker has pre-tax profit forecast of $14 million, which translates to EPS of 9.2 cents.
However, Investec continues to believe that the growth at the firm is undervalued and reiterated its ‘buy’ recommendation for the shares. It has set a price target of 105 pence, while the shares improved slightly by 2.6 per cent to 74.4 pence each in trading this morning.
Independent broker Northland Capital Partners has stuck with its 125 pence per share price target for Telit. It sees the firm delivering a 50 per cent increase in revenue during the second half over the sales generated during H1 2011.
