Adam Davidson, CEO of Trident Royalties, discusses offtake milestones and catalysts to boost FY24. Watch the video here.
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Thank you rivaldo for mentioning the rns. No sign of it here so I would have missed it. Just now wondering if I have missed any other relevant to my portfolio!! Truthfully though I only drwam about 80p!!~ I just keep holding...
Shore Capital have retained their 80p target following the contract wins.
They forecast 4.5c EPS this year, along with a $9.3m cash pile, or 8.5p per share.
That puts MWE on a current year cash-adjusted P/E of only 10 at 44.5p - and also paying a 6% dividend at 3.3c.
They conclude:
"As mentioned above each of the divisions has growth drivers with, in our view, Mottech well placed to potentially see much stronger demand than we forecast for its water management and control software. Typically, this improves the efficiency of irrigation systems, while reducing the cost of operating them. The Antenna division is likely to benefit from the rollout of 5G across the world as it already supplies seven of the top ten operators with its technologies and as illustrated by today’s further contract win is well-placed in defence as well as for the rollout of 5G in India, in particular. Similarly, we would also expect to see good demand for the defencerelated products and services of Summit/PSK, as shown by today’s contract wins.
We have an 80p per share fair value on the basis of a DCF analysis, which is more than corroborated were MTI to achieve an FY24F EV/EBITDA multiple of 12.8x (the average of our peer group). The next news is likely to be the reporting of Q1 FY24F results later this month."
Great news - and almost all of this will benefit the current financial year, which is looking stronger and stronger following further contract wins and the excellent outlook in the prelims.
And likely more to come:
"as defence spending continues to increase worldwide, we expect to see further contracts materialize"
Https://uk.advfn.com/stock-market/london/mti-wireless-edge-MWE/share-news/MTI-Wireless-Edge-Limited-Contract-Wins/93787433
I just intend to take dividend next week and put these back into the bottom drawer. These are diffilcult days to try and play the market..
Today's RNS shows 100,000 shares bought back at just over 46p, following a further 50k yesterday. MWE now hold 833,000 shares in treasury, so this buyback programme has accelerated markedly. Which is hopefully a sign that trading is continuing to go rather well.
Shore Capital reiterate their 80p target today, and conclude as follows:
"Outlook and valuation:
As highlighted above each of the divisions has growth drivers with, in our view, Mottech well placed to potentially see much stronger demand than we forecast for its water management and control software. Typically, this improves the efficiency of irrigation systems, while reducing the cost of operating them. The Antenna division is likely to benefit from the rollout of 5G across the world as it already supplies seven of the top ten operators with its technologies and as illustrated by today’s contract win is well-placed in defence as well as for the rollout of 5G in India, in particular. Similarly, we would also expect to see good demand for the defence-related products and services of Summit/PSK.
We have an 80p fair value on the basis of a DCF analysis, which is more than corroborated were MTI to achieve an FY24F EV/EBITDA multiple of 12.8x (the average of our peer group)."
This morning's $1.2m repeat contract win for military antennas is good news for this year's figures, but perhaps even more interesting is this comment:
"We see more opportunities in this specific area of conformal antennas, some for new development projects and some for use in existing products, but all resulting in our technology being used in more applications"
Https://uk.advfn.com/stock-market/london/mti-wireless-edge-MWE/share-news/MTI-Wireless-Edge-Limited-Contract-Win/93584016
Allenby Capital have updated on MWE - they have a 75p price target.
With a 7.2p per share cash pile, they forecast 4.56c EPS this year and a 3.3c dividend.
That's an ex-cash P/E of only 11.6 and a 5.3% dividend yield:
Https://wp-allenby-2020.s3.eu-west-2.amazonaws.com/media/2024/03/20240311-MTI-Wireless-Edge-Ltd-MWE.L-Allenby-Capital-Finals.pdf?c4076=on
Good to see the share buybacks continuing, with MWE evidently considering these higher prices to still be good value:
Https://uk.advfn.com/stock-market/london/mti-wireless-edge-MWE/share-news/MTI-Wireless-Edge-Limited-Transaction-in-Own-Shares/93518517
If MWE were to parcel off the now 583k shares in treasury to institutional buyers as previously they'd make a nice profit of probably £80k-£100k.
Actually picked one at the right time it seems for once! Ex-div soon hopefully it will keep some gains.
Breaking upwards chart-wise - new 9-month highs now.
Good to see the share price rising again on reasonably small volumes, and buyers paying the full 45p offer price - hopefully signs that there's not much stock around.
Thanks for your post. A good resume.... May take a while to sink in but in the meantime I will take the dividend
Having listened to the presentation, here's a few points I thought were interesting (in no particular order - any corrections welcome!):
- MWE have had a "very strong" start to 2024
- defence-related reveues were up to 44% of the total last year
- MWE are one of only 2 competitors in India for 5G backhaul business, as one other was disqualified last year for concerns over quality
- the October 7th attacks caused much destruction of not only telecoms equipment and towers, but also agricultural equipment and irrigation systems. Orders to replace these are now coming through
- more fountain projects are likely, firstly in Israel and then internationally. These have very nice recurring income
- Israeli defence budgets are being "increased dramatically"
- all R&D is expensed, not capitalised
- MWE are ready to look at more acquisitions, which will only be profit-enhancing
- the dividend has grown 110% since 2018
Here's the presentation:
Https://www.youtube.com/watch?v=rnbttewQ4qU
Here's the rest of Simon Thompson's tip:
"Strength from the military side of the business more than offset a slight dip in revenue from MTI’s 5G backhaul antenna solutions due to slower installation rates in certain markets.
However, as soon as 5G is rolled out in India (a key market), the requirement for MTI's products will be substantial. Also, the group’s automatic beam steering antenna solution that adapts to any small movements caused by different climate conditions is now entering into production after successful testing by key original equipment manufacturers (OEMs).
A climate change winnerA climate change winner
MTI offers investors exposure to the themes of climate change and water conservation through wireless water management systems, too. Water scarcity is a real global problem. Last year, the UN Water Conference reported that global
fresh water demand will outstrip supply by 40 per cent by 2030. This level of challenge underlines the importance of water conservation and the solutions that MTI offers customers (agriculture, municipal authorities and commercial entities), which can reduce water usage by 30 per cent.
In addition, MTI has been expanding its services beyond efficient water usage across public parkland and green open spaces, having recently completed a project to monitor and partially control 40 urban fountains for a municipality in Israel. It could become a valuable future revenue stream for a division that increased operating profit by 8 per cent to $2mn last year.
Admittedly, contract delays at two loss-making projects led to profits reversing at MTI’s electronics division. However, the directors report that increased defence spending by governments is creating a strong market environment to operate in, partially from the Israeli defence forces and partially from international markets via the Israeli systems houses. To this end, MTI’s electronics division has been completing several design wins for both new and existing customers. It augurs well for future sales. House broker Shore Capital expects divisional operating profit to bounce back 25 per cent to $1.95mn in 2024 and contribute to 9 per cent higher group operating profit of $5.1mn (£4mn).
On this basis, MTI is rated on seven times 2024 operating profit to enterprise valuation of £28.4mn. A 6.1 per cent dividend yield and a £0.5mn expansion of the share buy-back programme are also supportive. Trading around the level of my last buy call (‘MTI boosted by defence spending and offers 6% yield’, 15 August 2023), MTI’s shares rate a buy."
MWE have just been tipped by the Investors Chronicle's Simon Thompson:
Https://www.investorschronicle.co.uk/ideas/2024/03/11/mti-is-a-smart-play-on-the-defence-spending-boom/
"MTI is a smart play on the defence spending boom
This technology group is rated on a single-digit earnings multiple even though it is delivering double-digit profit growth, and offers a 6.1 per cent dividend yield
March 11, 2024
by Simon Thompson
Annual pre-tax profit up 12 per cent to $4.8mn
EPS rises 9 per cent to 4.58¢
Net cash of $8.1mn (9.2¢)
The latest results from Israel-based MTI Wireless Edge (MWE:40p) highlight the benefits of diversification as growth from the technology group's antennae and water management systems units more than mitigated a weaker performance from its electronics division.
The antennae business sells 'off the shelf' flat and parabolic antennas as well as custom-developed antenna solutions to a range of commercial and military customers. Buoyed by a sharp rise in military sales, divisional operating profit surged from $0.3mn to $0.8mn. Current events around the world suggest that requirements for military equipment will continue to grow in the coming years as western governments increase their defence budgets, too. Moreover, the conflict in the Middle East has triggered an increase in demand that should lead to higher stock levels of all military equipment being maintained by the Israeli government going forward. Defence-related work now accounts for 44 per cent of group sales.
etc"
Shore Capital have an 80p fair value here.
They note that "FY23A results were slightly ahead/in line with expectations".
They've maintained their forecasts for this year and forwards, which they note are firstly conservative and secondly exclude any potential acquisitions from the cash pile.
They go for 4.5c EPS this year, with a 3.3c dividend.
Net cash is forecast to rise to $9.3m - around 20% of the m/cap.
They conclude:
"Outlook and valuation:
Each of the divisions has growth drivers with, in our view, Mottech well
placed to potentially see much stronger demand than we forecast for its water management and control software. Typically, this improves the efficiency of irrigation systems, while reducing the cost of operating them. The Antenna division is likely to benefit from the rollout of 5G across the world as it already supplies seven of the top ten operators with its technologies and is well-placed in both defence and India. Similarly, we would also expect to see good demand for the defence-related products and services of Summit/PSK. We have an 80p fair value on the basis of a DCF analysis, which is more than corroborated were MTI to achieve an FY24F EV/EBITDA multiple of 12.8x (the average of our peer group)."
Happy to hold, I’m going to partake in the meet the company and 10am.
I thought the result on first glance look ok... Dividend too is pleasing
With the current macro situation today's results and outlook are very encouraging.
That's 3.6p historic EPS, with PBT up 12% and EPS up 9%. Which with the $8.1m cash pile puts MWE at 36.5p on a rather cheap valuation on a single figure P/E on an ex-cash basis.
Especially given the confident outlook for this year in all three divisions:
"The macro trends for all three remain positive: from the continuing roll-out of 5G cellular connectivity; to tackling the growing global issue of water scarcity; and the significant increases in local and international defence spending."
"Overall, MTI remains well positioned across all three divisions, with each division backed by strong macro trends underpinning their future prosperity. The first two months of 2024 have been in line with internal expectations and judging from the pipeline of potential opportunities, the Group is well placed, supported by a strong financial platform, to continue to seek to expand through a mix of acquisition-led and organic growth."
I'm also sitting on a loss, but happy to hold, nearly added today but didn't. I'll add on any weakness, but lets hope for some positive results.
I have let my shares here ride.. Been a long time since I was in positive territory bt is is just too easy to sell at a loss. I will take my chances and wait patiently for better times...
Results will be on March 11th per today's RNS.
Encouragingly - as with last year - there's no specific trading update, so under disclosure rules the assumption to be drawn is that MWE are trading in line with expectations (as they were last year).
For reference, expectations are for:
- 4.2c EPS, or 3.3p EPS
- $8.2m net cash, or 20% of the m/cap
- 3.2c dividend, or a 7.1% divi yield
Https://uk.advfn.com/stock-market/london/mti-wireless-edge-MWE/share-news/MTI-Wireless-Edge-Limited-Notice-of-Results-and-Investor-Presentation/93418839
Incidentally, jolly speculator is incorrect - Miton's percentage holding only fell slightly last November due to MWE's total voting rights having increased just prior to their disclosure and therefore their percentage holding having fallen below the 5% threshold. So perhaps a little less need for the LOL type expressions and a little more research is necessary.
Lol...so upbeat they are selling
that's what the last rns showed, no?
I mean...I'd be happy to be corrected..
Kepler Intelligence have isued new research on Miton's UK MicroCap Trust this morning run by Gervais Williams, and Miton have this to say about MWE:
Https://www.trustintelligence.co.uk/investor/articles/fund-research-investor-miton-uk-microcap-retail-feb-2024/returns
"Although this company continues to generate growth in profits and dividends upwards of 7%, the share price has suffered due to worries over its Israeli operations being affected by conflict. Earnings have also been impacted when converted into dollars due to weakness in the exchange rate. However, some of its aerials are being used in military applications meaning the company is busier than usual. Gervais and Martin remain upbeat, and they believe there is no dilution to the upside potential of the company."