News blog
Telit Communications
- BY: Andrew Hore |
- POSTED: 26/04/2009 |
Remote machine communications technology developer Telit Communications is confident that it can move into profit in 2009.
Revenues increased 13% to €59.1m in 2008. That was impressive considering the 40% plus estimated decline in the prices of chip sets. The market contracted because of this cost deflation so Telit gained market share.
Stripping out the gain on the partial disposal of a subsidiary, the loss was reduced from £2.47m to £397,000.
Net debt was €11.9m at the end of 2008.
Demand is difficult to predict - it has certainly been affected by the world’s economic problems. Telit’s products are designed into end products so there is a long lead time between gaining orders and generating revenues. The end products are being launched but they are not always selling as many units as expected.
Telit does appear to be doing better than its main competitors and it has undoubtedly won a number of contracts which will contribute this year.
House broker Seymour Pierce forecasts profits of €700,000 in 2009. It also predicts profits of €8.3m in 2010. Those forecasts were not changed after the 2008 figures were released. Investors are unlikely to take the 2010 forecast too seriously at this stage. It is important that Telit shows that it can achieve the 2009 forecast first.
At 17p a share, Telit is valued at £7.57m. The shares are trading on nearly 12 times prospective 2009 earnings.
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