The divergence between the wireless and travel sides of the Anite business continues with full year results (for the period ending 30 April 2011) showing wireless romping away while travel went backwards in terms of revenue and only an end-of-year contract saved it from utter embarrassment. Once again, the results highlight the dichotomy within Anite and raise the question of whether the company should sell off the travel business line (see Anite a “business of two halves” in H1).
Group revenue was up 19% to £93.7m and adjusted pre tax profit rose an impressive 62% to £16m although this excludes items such as the impairment and amortisation of acquired intangible assets, restructuring costs and so on. There was a £244,000 hit from restructuring costs during the year and £3.58m in costs for the amortization of acquired intangible assets. The operating margin increased by 4% to 19%.
Obviously, wireless was the leading division contributing 79% of group revenues and within that handset testing delivered the most. Order intake was £59.6m from £32.2m. Results were helped by 4G take-up (34% of handset testing revenue from 12%) and this promises to be a future growth driver. Network testing did not advance as well - order intake grew to £23m from £21.1m, and that was off of a historic low. However, investments in LTE testing products, the acquisition of Invex networking testing products, combined with regulations mandating the testing of certain LTE network aspects put the network testing division in a good position for future growth.
Anite describes the underperforming travel business line as “approaching an inflexion point” due to a multi-year contract with TUI Travel PLC to implement Anite’s @comRes reservation system in TUI’s UK & Ireland division. It is trying to move more customers to the new platform but immediate prospects do not indicate a change in travel’s fortunes.
The company is backing the travel business in the expectation of “steady long term growth”. But with the gulf between wireless and travel growing, and wireless clearly identified as the core of the business in the future, there are few apparent reasons to keep backing the travel business. The situation is acerbated by Anite’s statement that it has to invest in leading edge technology such as 4G, and LTE in order to do well in the wireless world. This sort of investment does not come cheaply.
Of the four geographic regions it operates in, the UK business declined to £15.2m from £15.36m. EMEA (excluding the UK) increased slightly to £29.67m from £28.06m. The biggest growth markets were the America's (£25.12m revenue from £19.54m and the rest of the world (£23.65m from £15.8m) which continues the trend set during 2011.