Anite (128p and 2% of JIC); I have bought a new holding in Anite this morning following a trading statement which shows it finished the year strongly. I have lifted the following description of Anite's business from Stockopedia.
Anite is a worldwide provider of hardware and software solutions, systems integration and managed services within its core markets of Wireless and Travel. It provides handset and network testing systems for the wireless market, and reservation and e-commerce solutions for the leisure travel industry. It has four operating segments: Handset Testing, which provides systems, hardware and software; Network Testing, which provides products for mobile network operators and network manufacturers to measure the coverage and quality of mobile phone networks, Travel which provides a suite of modules, supporting many types of tour operator and wholesaler models, from accommodation wholesalers to high volume package and dynamic packaging tour operations, and Group. In January 2013, the Company acquired Propsim channel emulation product set of Elektrobit Corporation of Finland.
The statement this morning showed strong results both from the handset testing business with revenue growth of around 10% and higher margins. Network testing also performed well with revenue growth of around 7 or 8%. Profits from the Travel division were in line with the previous year despite a shortfall in revenue due to a few customer delays which hopefully will come through in the current year. Propsim, which it acquired on 31st January "performed slightly above expectations with a particularly encouraging order intake".
Anite is a high margin, (19.6%) high return on capital (24.8%) business which generates substantial amounts of cash. At the 30th April the Company had net debt of £0.9m following the acquisition of Propsim in January which cost £26m.
Conclusion; Despite this morning's bounce the shares are still some 20% below their February highs of 160p. The Company is currently in a sweet spot with the roll out of 4G mobile services providing a boost to both its network and handset testing businesses. As the Company points out in its statement we are still at a relatively early stage in the rollout of 4G , which should sustain the business over the next few years. The shares are valued at about 14.5x April 2014 consensus earnings for growth of about 18% which seems to me to give ample scope for upside in the share price. It is also forecast to pay a dividend of 2p in the year to April 2014. (See Transactions)
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