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Telit's 2018 revenue to be at top end of range

"The board has changed significantly during the course of the year and I believe that the strategic and governance leadership of the group is now in place to deliver upon our true potential," said Paolo Dal Pino, the executive chairman of Telit

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The company said the sale of its automotive division is still expected to complete this month

Internet of Things enabler Telit Communications PLC (LON:TCM) said revenue for the year just ended will be at the top end of its guidance range.

The company, on the comeback trail after a turbulent 18 months or so, said it expects to report revenue for 2018 of around US$427mln, up from US$374.5mln the year before.

READ Telit confirms acquisition of its automotive division is expected to complete by 31 January 2019

The revenue growth of 14% was driven by a 21% increase in Cloud and connectivity revenues to US$33.5mln from US$27.7mln in 2017.

The group said underlying earnings, or EBITDA, are expected to be in line with previous guidance, falling somewhere in the range of US$30mln to US$35mln (2017:US$18.1mln).

Net debt at the end of 2018 was around US$34.5mln, compared to net debt a year earlier of US$30.2mln.

"Over the last few months, we have significantly strengthened the Group's infrastructure and delivered double-digit revenue growth and improved profitability for the year just finished,” said Paolo Dal Pino, the executive chairman of Telit.

"We are seeing promise of growth across markets and expect to improve further our financial performance in 2019; based on continued revenue growth, gross margin control and, where possible, improving upon the $10 million of additional cost savings previously announced."

In a note to clients, analysts at broker finnCap pointed out: “Although H2 delivered profit in cash, the company finished the year with net debt rising from $30.2mln to $34.5mln.”

They added: “This debt should be expunged by the sale of the Automotive business to TUS International in H1. The buyer is currently raising money through a placing to complete the purchase at the end of this month. Once this is confirmed, the business should be strongly positioned for recovery.”

finnCap has a 200p target price on Telit shares, with the stock currently trading at 128.70p, down 2.2% on Monday’s close.

 -- Adds analyst comment, share price --

Quick facts: Telit Communications PLC

Price: 133.8 GBX

AIM:TCM
Market: AIM
Market Cap: £178 m
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