Anite IMS

Anite is a global provider of hardware and software solutions, systems integration and managed services within its core markets of Wireless and Travel. I have a holding in my growth portfolio (epic code: AIE).

Anite issued an interim management statement today covering their first quarter, declaring that trading has been relatively quiet, this though does reflect the usual quarterly seasonality that they traditionally experiences.  Despite this they do expect to meet market expectations for the year, due to the pipeline of opportunities for the rest of the year continuing to build, being materially ahead of the same period last year. 

For the largest division (65.7% of sales last year) Handset Testing, after performing strongly during the last few months of last year, they had a slow start to the current year.  Although they state that order intake in the first quarter is slightly ahead of the same period last year, the phasing of the delivery of these orders and the low opening order book at the start of the year, meant that revenue and operating profit for this division was down on last year.  They expect sales for this division to be flat at the half-year and operating profits to be slightly lower.  Key to the Division's full year will be the order intake level at the half-year stage.

Network Testing (19.7% of sales last year) has seen good underlying demand across its product range, with revenue and operating profit ahead of last year.

Travel (14.6% of sales last year) has benefited from an uplift in implementation revenue and from the increase in recurring revenues that it reported in the second half of last year, with revenue and operating profit ahead of last year.

Cash was consumed in the quarter, as net debt at the year-end of £0.9m rose to £4.0m at 31 July 2013.

 Obviously crucial to the full year is the realisation of the "pipeline of opportunities", most especially in the Handset Division, turning in to orders in sufficient time to be able to convert them to sales.

The market, as earlier in the year following their March IMS, is not giving the company the benefit of the doubt and marked the shares down by 6.9% to 117p.  They stated at the time of their prelims that the first and third quarters would be relatively quiet.  They delivered a creditable performance last year and I would expect them to do the same this year.  So, assuming the second quarter shows a good uplift in order intake from the materially higher pipeline of opportunities, I am still comfortable with a range of 9.1 to 9.4 EPS for the year as I detailed at the time of their prelims here.