IPTV technology company Amino Technologies grew its revenues in the six months to May 2011 and it is well-placed to take advantage of growth in newer markets.
Revenues grew from £18.1m to £24.7m in the six months to May 2011. The improvement in revenues is mainly down to the initial orders from Telecom Italia for so-called ‘Over-The-Top’ (OTT) video technology - effectively the ability to access recent programmes through a set top box. However, those initial orders did not yield a profit. The latest order will generate a gross margin of well over 10%.
Stripping out the Telecom Italia sales and stock provisions gross margins rose from 29.7% to 35.7%. The pre-tax loss was cut from £944,000 to £416,000 but this was down to the lack of unrealised foreign exchange losses in the latest period. Excluding those, the underlying loss would have been higher.
Strong cash generation due to the unwinding of the stocks of product sold to Telecom Italia meant that net cash was £11.6m at the end of May 2011.
There were 298,000 units shipped in the first half. The order book of 153,000 units underpins the second half forecasts. A number of operators are assessing Amino’s OTT technology and a simpler version is being launched that is more suitable for smaller broadcasters.
At 44p a share, up 1.75p, Amino is valued at £25.5m. The cash in the bank accounts for nearly one-half of the market value of the company.
The business is second half weighted and Amino is on course to make a profit this year, although house broker FinnCap expects it to fall from £1.9m to £1.6m. However, the broker expects a jump in profit to £2.9m in 2011-12. The shares are trading on 16 times 2010-11 prospective earnings, falling to nine in 2011-12.
Download the June 2011 edition of AIM Journal at http://www.hubinvest.com/AIMPDFJuly2011_22.pdf
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