LONDON (Alliance News) - Anite PLC said Wednesday it expects a significant rebound in profitability in the coming year as it narrows its focus to the wireless market, after posting a decline in pretax profit for the year to end-April, hit by exceptional costs and a weaker performance in its handset testing business.
The wireless software and hardware company maintained its total dividend at 1.84 pence. Anite said that going forward it intends to maintain a progressive dividend policy.
Anite posted a pretax profit of GBP8.9 million in the financial year to March 31, down from GBP22.1 million in the previous year, as revenue declined to GBP109.2 million from GBP113.1 million and it posted exceptional costs of around GBP6 million.
Exceptional costs included GBP500,000 in restructuring costs and a GBP4.8 million amortisation of acquired intangible assets.
Anite said it had seen a disappointing first half, particularly in its handset testing business, caused by the consolidation of its customer base due to merger and acquisition activity, a lack of specific technology drivers, and the expected decline in the 2G/3G business ahead of the arrival of new 4G networks.
As a result, revenues in the handset testing business declined to GBP77.3 million from GBP87.0 million.
Additionally, the company acquired Elektrobit Corp's Propsim channel emulation product portfolio last January, which came with a higher fixed-cost base. As a result, the handset testing business' operating margin declined to 14% from 30%.
The company's network testing saw revenue rise to GBP31.9 million from GBP26.1 million, driven by demand for 4G products, and boosted by its acquisition of Genetel SAS last July.
After the year end, the company sold its travel business for GBP45.0 million in May as it slimmed down its operations to focus solely on the wireless market. In the year ahead, Anite expects a "significant" rebound in profitability, forecasting revenue percentage growth in high single digits.
Although the company's confidence is underpinned by technology and customer trends, it noted that markets can be unpredictable in the short term, particularly for its handset testing business.
"We believe that with two well-positioned, complementary businesses and a strong balance sheet, Anite is entering an exciting new phase in its development," said Chief Executive Christopher Humphrey in a statement.
Shares in Anite were trading down 2.7% at 91.50 pence Wednesday.