Shares in handset testing specialist Anite plunge 15%

Worry over profits sparks investor exodus

Shares in UK mobile phone testing firm Anite suffered a huge 15 per cent drop in London tonight [11th March 2013] after the company admitted that its order intake is lower than a year earlier. The Berkshire-based firm, previously known as Cray Electronics, also admitted it needs to put in a strong fourth-quarter to meet financial targets for the year, further spooking investors.

Anite, which provides handset testing software to the likes of Samsung, BlackBerry and Ericsson, is still thought to be on track to deliver 10 to 12 per cent growth comfortably over the next few years.

However, its description of pretax profit for the nine months to January 31st as being “broadly in line” with analysts’ expectations triggered alarm bells.

One analyst, George O’Connor of Panmure Gordon, dryly noted that “broadly” was not the same as in keeping with expectations, adding, “Broadly is basically a bit of a caution and you can argue a bit of the hot money is moving out.”

Said another market watcher, Milan Radia of Jefferies & Co, “The market needs to get a sense from management about their confidence in terms of meeting numbers for the full year.”

For its part, Anite passed off its disappointing interim statement as merely a reflection of the relatively quiet seasonal period for the business.

As opposed to the unusually strong growth period a year earlier (see here) when customers were investing heavily in 4G handset testing.

Making matters worse were adverse currency fluctuations over the nine months to January 2013, it claimed.

The company revealed that at the end of February this year [2013] it had a net debt of £8.5 million, compared to a cash pile of £16.9 million in April 2012.

Though the acquisition of Propsim a month earlier for £25 million needed to be factored in, it argued.

Commented Christopher Humphrey, Anite’s CEO, “The company remains on track to deliver good growth this year though, as expected.

“We require a strong Q4 performance in order to achieve expectations for the year.”

“Our sales pipelines continue to increase and the fundamental growth drivers of our businesses are developing positively, despite economic headwinds.”

At close in London tonight [March 11th 2013] Anite’s shares stood at 131 pence, compared to an opening price of 143 pence.