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Telit Communications confirms FCA investigation into timeliness of reporting

Published: 12:44 27 Mar 2018 BST

Telit
Telit has said it faced a "number of unique challenges" in 2017

Telit Communications Plc (LON:TCM) is being investigated by Britain’s financial watchdog into the company’s timeliness of reporting.

The FCA will examine the Internet of Things company’s announcement of certain matters included in its interim results on 7 August.

Telit said it has "co-operated fully with the FCA in its enquiries to date and will continue to do so".

At the first half results, the group reported growth in earnings and revenues but said results were held back by delayed US certifications for long term evolution (LTE) wireless communication products.

Telit issued a wide guidance range for 2017 adjusted underlying earnings (EBITDA) of between US$47mln and US$60mln. The forecast for revenue was between US$400mln and US$430mln. 

Telit cuts ties with CEO

About two weeks later, the company dismissed its chief executive Oozi Cats amid claims he was linked to US fugitive Uzi Katz.

READ: Telit shares rise as boss Oozi Cats resigns after investigation into historical indictments

Uzi Katz and his wife Ruth V Katz were accused of fraud in connection with a series of property deals in Boston in the 1990s.

Following his departure, Telit announced it had agreed new financing with its lenders.

READ: Telit off to strong start in 2018; revises banking covenants

Telit addresses challenges

Earlier in March, the company downgraded its adjusted underlying earnings expectations to between US$20mln to US$23mln for the year to December 31 from its September guidance for earnings of between US$44mln to US48mln. 

It also lowered its revenue forecast to US$374mln to US$376mln from a previous estimate of US$390mln to US$400mln.

Telit said the changes reflected a “conservative approach” ahead of the publication of its results in April due to higher spending on research and development. 

"The group clearly faced a number of unique challenges during the course of 2017 which have unquestionably affected our financial performance in the short term. We are resolved to ensure that the business is placed on a sustainable footing for the longer term and the group's financials are recalibrated on a prudent and conservative basis,” said Telit’s chairman, Richard Kilsby.

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