Trading Update

RNS Number : 5939Q

Anite PLC

16 October 2013

 



16 October 2013

Anite plc

Trading Update

Anite plc ("Anite" or "the Group"), the leading provider of software solutions to the international wireless and leisure travel industries, announces a trading update for the half year ending 31 October 2013.   

Overall, the Board now believes that the shortfall in first half profits compared to last year will not be fully recovered in the second half and has therefore reduced its expectations for the full year outcome.

Following the reported quiet first quarter for trading in Handset Testing, the anticipated pick-up in activity levels in the second quarter has not been as marked as had been expected at the time of the first quarter IMS.  There has been a continued trend for pipeline opportunities to take longer to conclude due in part to the uncertainty created by reorganisations and consolidations affecting a number of tier one handset and chipset manufacturers.  This is resulting in potential contracts slipping to later in the financial year as participants, both acquirers and targets, pause to evaluate their requirements. 

The Board now expects it is likely that revenue in Handset Testing for the first half will be around 25% down on the comparative period last year when it reported £40.5m. Although order intake is expected to be around 10% down, an increase in maintenance renewal orders has led to an enhanced order book.  The shortfall in the gross margin associated with the revenue decline, in addition to the increase in fixed costs following the Propsim acquisition in January 2013, means that it is likely that the Handset Testing business will be around break-even for the first half of the year. 

The Board believes that the market conditions seen in the first half will improve in the second half although not to the extent that they can compensate for the first half shortfall.  We are confident that the business drivers for Handset Testing remain unchanged and there are a number of specific technological and market drivers that, in addition to our normal seasonal revenue bias, we expect to drive materially increased activity levels in the second half.  Overall, the Board therefore expects second half Handset Testing revenues to be broadly in line with the £46.5m achieved in the second half of last year.

Given the short-term visibility within our Handset Testing order pipeline, there is the potential for improvement in this expectation if the recovery in markets proves more significant.

Trading in the Network Testing and Travel businesses continues to be at least in line with expectations with good year on year growth.

Commenting, Christopher Humphrey, Chief Executive, said:

"The first six months of this year has seen unusual market conditions in the mobile industry which has led to a disappointing first half. This has not changed our fundamental view that we remain at the early stage of the LTE technology rollout, nor our confidence in the market opportunity and our market position. 

"We believe that the second half for Handset Testing will be materially improved on the first half. We expect to exit the year on a strong underlying run rate which will allow us to continue to progress in the longer term."

Anite will issue its half year results for the six months to 31 October 2013 in early December and will update shareholders at that time on how visibility for the second half is developing.

-     Ends    -

A conference call for analysts will be held today at 8.30am.

Please contact Jack Holden at MHP Communications on [e-mail] or on 020 3128 8167 for dial-in details.

Anite plc                                                                                         www.anite.com

Christopher Humphrey, Chief Executive                                         01252 775200

Richard Amos, Group Finance Director

MHP Communications                                                                 020 3128 8100

Reg Hoare / Giles Robinson 

 

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