Internet of Things (IoT) enabler Telit Communications Plc (LON:TCM) has reassured investors that the underlying business remains strong despite recent off-field issues.
Telit endured a difficult summer, with its former chief executive Oozi Cats the subject of an internal investigation into alleged historical indictments.
Cats eventually resigned from his position after a law firm hired by Telit found that he was the same Uzi Katz named in US court papers back in 1992.
Business ‘fundamentally unchanged’
With new interim boss Yosi Fait at the helm, Telit launched a business review in the wake of the saga which is looking at the group’s financial processes and product lines.
While not finished completely yet, Telit said today that it remains “confident of the strength of the financial controls” within the business, although to reassure investors it has engaged an independent accounting firm to take a deeper look.
As part of that review Telit wanted to bring in three additional independent non-executive directors, one of whom will become chairman. That search is ongoing and “progressing well”.
Sill expects revenue growth this year
Telit still expects “significant cash generation” in the second half of the year and also expects to satisfy all financial covenants when it is tested at the end of the month.
The company has also narrowed its full-year guidance to between US$390-400mln for the year to 31 December (2016: US$370.3mln).
Adjusted underlying earnings (EBITDA) are expected to come in at US$44-48mln (2016: US$54.4mln) before one-off restructuring costs.
‘More disciplined and prudent approach’
"Despite a very difficult few months, we have retained our close customer relationships and our highly skilled employees and management team,” said interim chief executive Yosi Fait.
"We are focused on implementing a refreshed, more disciplined and prudent, as well as transparent, approach to corporate governance and the delivery of increased shareholder value.
"We are now in an ideal position to address the growing opportunities in the high-growth IoT industry. So I am confident that we can exploit this position, supplying customers with the best-in-class end-to-end IoT solutions."
Telit expects to publish its third quarter results in mid-November.
Shares were down 7.3% to 176p in early deals on Monday.