Internet of Things (IoT) enabler Telit Communications PLC (LON:TCM) has had a chequered past but said today its turnaround plan is on course.
The group returned to double-digit percentage year-on-year growth in the first half of 2018, with revenues up to US$201.7mln from US$177.6mln in the corresponding period of 2017.
IoT cloud and connectivity revenues rose 16.2% to US$16.5mln from US$14.2mln the year before.
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Telit also saw better traction in the market, more design wins, including customers with significant IoT projects and better service level to customers, the company said.
Adjusted underlying earnings (EBITDA) dipped to US$12.5mln from US$14.7mln in the first half of last year.
The group generated US$21.1mln in positive cash flow from operating activity, marking a turnaround from the first half of last year when it saw a cash outflow of US$3.3mln.
Net debt at the end of June has narrowed to US$25.0mln from US$30.2mln at the end of 2017. The group is in the process of selling its automotive division for US$105mln and expects this transaction to close before the end of the year.
READ: Telit up as IoT firm agrees to sale of automotive division for US$105mln
Telit said it recently changed its organisation and completed a full integration of its products and services teams under a single structure.
"During H1 2018 we made good progress in implementing our turnaround plan based on the main objectives: focus on industrial IoT products and solutions; return to double-digit revenue growth; stabilise gross margin; and reduce our cash operating expenses,” said Yosi Fait, the chief executive officer of Telit.
"The sale of the automotive division together with our organisational changes will enable us to solely focus on the considerable opportunities in the industrial IoT space as well as reducing our operational cost base,” he added.
Fait noted that gross margins have improved from the second half of last year and that the company’s cost optimisation plan is well underway.
The group recently introduced a new key performance indicator, “profit in cash”, which it defined as what was left of adjusted earnings before interest, tax, depreciation and amortisation after deductions have been made for capitalisation of research & development and capital expenditures.
The first half of 2018 saw a US$4.1mln improvement in the loss in cash at US$5.7mln (first half of 2017: loss of US$9.8mln).
"Current trading remains in line with our expectations. We expect to maintain double-digit revenue growth during the rest of 2018, which coupled with good progress with the other objectives, leads us to expect to deliver positive results including 'profit in cash' for the full year," Fait said.