Tuesday, 15 September 2009

Anite – still marking time

(By Philip Carnelley, 15 Sep 09 08:00) Ahead of its AGM today Anite has issued an interim trading statement. There was nothing really new since its prelims announcement back in July. As we reflected then, (Anite betting on 4G), Anite stands on 2 legs and both are experiencing difficulty. Its travel software business is suffering because travelling is down due to the economic downturn. It continues to believe it has the right offering, but customers are reluctant to spend – sales cycles are long. On the other leg, the (in our view) more strategic wireless testing arm, handset testing is in decline. Anite blames this on a saturated market pending development of new “4G” technology. 4G testing (which is eating into profits) is still in the development stage and Anite is pinning its hopes on successful roll-out, but this will only start to take off next year.

If Anite could find a buyer for one or other of its business divisions, things would look very different. But that doesn't seem likely, so it’s a question of sitting tight and executing the strategy. The company is sitting on £26m of cash (thanks to its sale of the public sector business). Although that has fallen £1m since the end of April, it has now cut costs in the wireless division, so it can afford to mark time until the 4G testing roll-out begins, and in the hope that the hard-pressed travel industry will continue its recovery along with the world economy.

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