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MTI Wireless Edge - Strong first quarter

MTI Wireless Edge - Strong first quarter

MTI Wireless Edge (LON:MWE) has reported results for the first quarter (Q1) of 2019, showing continued strong progress. Revenues increased by 16% year-on-year and operating profits 66%. We maintain our full-year (FY) 2019 forecasts, with FY revenue growth of 10% and earnings per share (EPS) growth 27.8%.

All comparisons are on a pro-forma basis to include a full year of MTI Computers revenue in the prior year.

At the time of the merger between MTI Wireless Edge and MTI Computers in August 2018, the company forecast strong demand across each of its business segments. These expectations have been borne out in Q1.

Water Solutions: Demand remains strong globally for smart irrigation systems. During the quarter, the business secured its largest ever order, a breakthrough order for irrigation control systems into the Chinese market.

Antennas: Demand drivers include 5G wireless infrastructure in the civil communications sector and increasing budgets among major military customers. The outlook remains positive.

Distribution & Professional Consulting Services: Revenue for the division grew very strongly in the quarter as previously announced projects matured into revenue generation. A new order for aerostat systems (now included in this segment) will deliver revenues in the coming quarters.

Full report is available via Capital Network website
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During the last week, the company has made two significant announcements:

  • The nomination of Moni Borovitz as CEO, from finance director previously, subject to the annual general meeting on 14 March.
  • A share buyback of up to £150k, commencing 28 January

The company came into being in its current form via the August 2018 merger of MTI Wireless Edge with MTI Computers, with Moni Borovitz playing a leading role in delivering the merger.

In this report, we present a reminder of the key dynamics of the merger. We note that since the merger, the share price has yet to stabilise and we believe that the buyback may be helpful in this regard.

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