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MTI Wireless Edge - Strong progress continues

MTI Wireless Edge - Strong progress continues

MTI Wireless Edge (LON:MWE) reported results on 11 March for the full year to 31 December 2018. The results show continued strong progress following the August 2018 merger of MTI Wireless Edge with MTI Computers. Revenues increased by 35%, or 2% organically, operating profit +21% organically, and earnings per share (EPS) +14%. The statement also highlights a healthy order backlog and pipeline of opportunities going into 2019.

The company has compelling growth opportunities in all four operating divisions, including 5G wireless systems in Antennas and the global demand for smart irrigation driving Water Solutions. On page 2 we provide an overview of the divisions.

The share price has increased 21% from its lows in January, but remains on a discount valuation, with a 2019e price/earnings multiple of 7.7x and a dividend yield of 6.5%. We consider these metrics surprisingly low for a company with net cash balances and a strong growth outlook.

Data in the table is shown on a pro-forma basis for 2017 and 2018 (merger applied for 12 months) and using an exchange rate of US1.30 to the pound to calculate a dividend yield.

Full report is available via Capital Network website


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