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MTI Wireless Edge Limited

MTI Wireless Edge Ltd Experience continued growth

MTI Wireless Edge Ltd (LON:MWE), a market leader in the manufacture of flat panel antennas for fixed wireless broadband and a wireless irrigation solution provider, today announced its audited results for the year ended 31 December 2017 (the “Period”).

Highlights:

· Earnings per share increased by 30% to 2.36 US cents (2016: 1.81 US cents)

· Revenues increased by 13% during the Period to $26.4m (2016: $23.3m)

· Gross profit increased by 12% during the Period to $9.5m (2016: $8.6m)

· The Company generated $1.4m of cash from operation (2016: $1.2m)

· Profit before tax increased by 35% during the Period to $1.6m (2016: $1.2m)

· Shareholder’s equity grew during the Period to $20.1m (31 December 2016: $18.9m)

· Dividend of $0.02 per share (2016: $0.01 per share) declared with a scrip dividend alternative offered to all shareholders

Chairman’s Statement

I am pleased to report on our audited results for the financial year ended 31 December 2017, during which we continued to experience growth of the business in both the antennas and wireless irrigation controls segments. In 2017, we continued to invest and strengthened our sales and marketing teams in key territories to lay the foundations to capitalize on the enormous opportunities and the future growth.

As a result of Climate Change and droughts being experienced across the globe, water is becoming a critical natural resource and its management is becoming essential. These developments are providing opportunities for the Company to market and sell its solutions offered by Mottech from our offices around the world.

In the antenna segment, we experienced strong growth in 2017 centered on our commercial antenna products. Nevertheless, we continue to see good demand for our military antenna and, given the current backlog and pipeline of opportunities in this segment, we believe that the growth will continue in 2018 and beyond. In the broadband wireless access sector, we continue to progress with our millimeter wave (including 60 – 80 GHz and 5G) antenna solution and expanded our offering into dual band subsystem antenna solutions – this will increase our unit selling price while strengthening our relationship with customers. We are confident that this will be part of MTI’s growth in the future.

We believe the underlying drivers of our business, such as continued growth in data usage and increasing subscriber numbers, are part of long-term trends that we expect will continue for the foreseeable future. This, together with the requirement for efficient water management, provides us with confidence in both the Company’s short and long-term growth prospects.

Following a review of the performance of the business, the Board decided to declare a final dividend of $0.02 per share. As it is in the interest of Shareholders to receive a yearly yield on their investment, while at the same time the Company manages its earnings and cash generation, it was decided to offer a scrip dividend alternative to Shareholders. The Board believes that the ability for qualifying shareholders to elect to receive dividends from the Company in the form of new Ordinary Shares or new Depositary Interests rather than cash is likely to benefit both the Company and Shareholders. If qualifying shareholders do elect to receive scrip dividend shares, the Company will benefit from the ability to retain the cash which would otherwise have been paid out as dividends. A circular regarding the scrip dividend alternative will be issued to shareholders shortly.

I would like to thank our employees for their contribution to the Company and for their dedication and creativity, which has enabled us to achieve these results. I would also like to acknowledge with thanks the employees’ families for their continued support.

Zvi Borovitz

Non-Executive Chairman

 

Chief Executive’s review

I am happy to report that during 2017 we experienced double digit growth in both segments of the business resulting in 13% revenue growth which translated to 30% growth in earnings per share.

Our wireless controller segment grew by 11% in 2017 and we continue to see many opportunities to grow this business and remain focused on building our offering for various markets in the water management segment. Part of this effort is focused on China where we established a joint venture with our distributor in 2017 and we believe this market will be one of the fastest growing market for us in the near future. While investing in developing this business segment we were able to meet our long-term goal of having over 10% operating margin.

In the antenna segment we grew by 16% in 2017 – this growth came from both the RFID and broadband access solutions. The military segment showed a small decline in revenues in 2017, mostly due to delays in orders that were received towards the end of the year but which are now expected to come to fruition at the beginning of 2018. The Company made progress in the military segment during 2017 and entered 2018 with large backlog and encouraging pipeline of opportunities including the new line of antennas for a disposable application which we believe will be part of our future growth in military antenna market. During 2017 we opened a new company in India (owned 49% by the Company) to meet the offset requirement the Israeli military industry has with the Indian government (totalling several billion of US Dollars) – we believe this represents a significant opportunity for us as we are well established in India and know the market very well. Given the above we have strong belief that the growth will continue in 2018 and beyond.

Our RFID segment continued to grow for the fourth consecutive year showing growth of nearly 50% since 2014, and now represents 18% of the antenna segment. We see more applications that require the use of such solutions and our position in this market, still in its initial stages, remains strong. Our key future goal is to ensure that MTI remains well positioned in this market, to maximise the benefits of the continuing world-wide growth in the use of RFID technology.

In our key market of broadband wireless access, we had 30% revenue growth in 2017 primarily in the legacy segment that became more project oriented. We remain focused on the development of the millimeter wave (including 60 – 80 GHz and 5G) market as we see improvement in demand coupled with cost reduction initiatives of all players and believe this will be the next growth engine for the broadband antenna business. Our key advantage of flat antenna remains solid and we continue to develop a dual band dish solution together with our customers, to increase our part in the total solution.

To achieve future growth, the Company aims to extend its leadership in the antenna markets and further develop Mottech’s control offering to rapidly expedite its growth potential in this market and bring our customers added value.

Dov Feiner

Chief Executive Officer

Declaration of final dividend with a scrip dividend alternative

The Board of MTI is pleased to announce a final dividend in respect of the year ended 31 December 2017 (the “2017 Dividend”) of US$0.02 per ordinary share in the Company (“Ordinary Share”). It is intended that the 2017 Dividend will be paid on 5 April 2018 to holders of Ordinary Shares recorded on the register as at the close of business on 2 March 2018.

The Company will also be offering a scrip dividend alternative to the 2017 Dividend (the “Scrip Dividend Alternative”) to certain qualifying shareholders (“Qualifying Shareholders”). Under the Scrip Dividend Alternative, Qualifying Shareholders may elect to receive new ordinary shares (or new depositary interests, as applicable) (the “Scrip Dividend Shares”) in place of their cash dividend. Qualifying Shareholders may only elect to receive Scrip Dividend Shares in respect of their entire 2017 Dividend entitlement and may not split their 2017 Dividend entitlement between the two alternative options. A circular and form of election (the “Scrip Election Form”) will be posted to Shareholders today to explain how Qualifying Shareholders may elect to take up the Scrip Dividend Alternative. Scrip Election Forms or, for Shareholders with interests held through CREST, the CREST dividend election input message must be submitted and returned by the deadline of 5.00 p.m. on 22 March 2018.

The Board believes that the Scrip Dividend Alternative is likely to benefit both the Company and shareholders. MTI will be able to retain the cash that otherwise would be paid out as cash dividends and re-invest into the Company. Qualifying Shareholders will be able, inter alia, to increase their interests in MTI without incurring dealing costs or paying stamp duty reserve tax.

The Scrip Dividend Alternative is conditional on:

(a) admission of the Scrip Dividend Shares to trading on AIM; and

(b) the Board not deciding to revoke its decision to offer Scrip Dividend Shares.

Each Qualifying Shareholder’s entitlement to Scrip Dividend Shares is to be calculated based on the Scrip reference price per ordinary share, which will be calculated based on the mean closing mid-market price of an Ordinary Share between 1 March 2018 and 7 March 2018 (the “Scrip reference Price”).

Event

 

Date

Record date

2 March 2018

Expected date for confirmation of the Scrip reference Price per Ordinary Share

8 March 2018

Final time and date for receipt of Scrip Election Forms (for Ordinary Shares held in certificated form) and dividend election input messages in CREST (for Depositary Interests)

5.00 p.m. on

22 March 2018

Posting of cheques for payment of cash dividends

4 April 2018

Dispatch of certificates for Scrip Dividend Shares that are to be held in certificated form

5 April 2018

CREST accounts credited with Depositary Interests in respect of Scrip Dividend Shares

5 April 2018

Expected date for admission of Scrip Dividend Shares to trading on the Alternative Investment Market

5 April 2018

 

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Disclaimer: Statements in this article should not be considered investment advice, which is best sought directly from a qualified professional.