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Nice summary Rivaldo.
Rather muted response to a reasonable set of results - clearly some selling into the news but I still thought it would pick up a bit more.
Small caps share prices really do seem to be struggling to gain traction at the moment - even when, as with mwe, they have shown that they can deliver through the downturn in the first half of the year.
Yestredays's meeting recording is now available and is perfect - congrats to InvestorMeet:
Https://www.investormeetcompany.com/investor/meeting/results-for-the-six-month-period-ended-30-june-2020
Highlights:
- already confident in meeting full year expectations due to order books and cost savings
- cost savings are sustainable going forward for H2 and next year, i.e heavily reduced sales and marketing, travel and exhibition costs, which normally comprise 13%-15% of revenues
- H2 normally shows higher profitability, and this year that will especially be the case given COVID-19
- MWE have $7.9m net cash plus a $5.5m property (net of mortgage), i.e $13.4m of tangible asset value against the £32m m/cap
- MWE have paid 5.5c of dividends in the last 3 years, i.e $4m of dividends
Antennas
- 5G is the biggest growth driver in Antennas, accelerated by COVID-19
- next year will see the big jump in 5G growth
- the LTE/TV White Space segment is also seeing faster growth due to COVID-19, with more broadband into homes and offices
- MWE are the "only company" who can provide both dual band and flat antennas
- MWE are engaged with 4 of the top 7 radio manufacturers in the world, with over 30% of market share
- but not with Huawei, so any loss of business by Huawei should benefit MWE
Machine to Machine Water Management
- China growth is coming this year for the water/irrigation division
- since April Chinese growth has recovered
- MWE have signed several new agreements in China in the last 2-3 months, including one for co-operation with a leading Chinese agricultural company, which has already resulted in product shipments
- expanding in Peru and Chile and Sout America in general
Distribution & Consulting
- revenues are now coming through from product wins 2-3 years ago
- Russian contract wins announced earlier this year will benefit next year onwards
MWE are looking for profitable, earnings-enhancing acquisitions in wireless.
They could also expand into wireless electricity management and into lighting in parks etc.
I flirted with the idea of investing here a while back but felt hesitant and now, having seen the HY results, I can see my hesitancy was mistaken because they've outperformed what I had anticipated.
Seeing as H2 seems to always be much better than H1, it looks like there'll be some strong 10-20% growth this year despite all the disruption from covid.
The (forward) PE ratio isn't what I would consider cheap but it's probably low compared to the growth achieved or certainly compared to the growth they would achieve in a 'normal' (non covid-affected year).
The EV/EBIT ratio is lower than the PE ratio, always a good sign of the financial health of the company as well.
I need to do more research to fully understand the business but this has risen well up my list of shares to invest into next.
I know the market reaction has been rather subdued today but it's clear this'll rise above 40p soon.
Best of luck all : )
Paul Scott has reviewed MWE's rsults on Stockopedia today, and, allowing that he knows nothing about the company itself, has concluded very positively:
"My opinion - as usual, this is just a review of the numbers. It’s up to you to form a more detailed understanding of the company, and to predict its future. I can’t possibly do that for the 500+ companies I cover.
Since the company has today confirmed 2020 expectations, then we should be able to rely on the growth amp; value graphics. As you can see below, it’s a sea of pleasingly dark green.
I can see why some readers like this share, it looks good."
Yes, almost impossible to follow at times - always seemed to be at the important bits as well (more recent orders from China ??)
Will listen to the recording later - generally he seemed very positive about things going forward.
really good update. Share price reaction a little underwhelming. May pick up a little over next few days when results are fully digested. Low PE bodes well and decent divi too
Tried listening through the just-finished InvestorMeet webinar, but the sound quality was terrible, dipping in and out and sometimes going altogether. Did others have the same problems? Perhaps the recording will be cleaned up.
Picked up a few encouraging snippets:
- confident in meeting expectations due to order books and cost savings
- cost savings are sustainable going forward, i.e heavily reduced travel and exhibition costs
- MWE have $7.9m net cash plus a $5.5m property, i.e $13.4m of tangible asset value against the £32m m/cap
- China growth coming this year for the water/irrigation division
Will have to wait for the recording to listen properly.
It seems I was too cautious in my expectations :o))
The H1 results are very impressive given the pandemic etc. Revenues are up, but operating profit is up a whopping 28% to $1.9m and EPS is up 12% to 1.65c. Plus H2 is normally better than H1.
MWE are also already confident enough to state that they're on track to meet expectations for the year.
Net cash is up 50% to $7.6m...
And most importantly, all three divisions are performing well.
'Especially given the large cash pile and other tangible asset backing' - and growing even larger...
I'm not expecting particularly exciting numbers tomorrow, especially given the effects of COVID-19 and given that last year's H1 results were very strong. The main point of interest will be the outlook for H2 and onwards.
If there's progress on 5G in particular, as well as for Mottech on the water products side, then the share price should be nicely supported. Especially given the large cash pile and other tangible asset backing.
yes, looks as though people are taking their position prior to Monday's results. Looking good
Great to see buyers now paying the full 34p offer price. Hopefully this means that if Monday's results are indeed OK then the supply of shares on the market will be scarcer.
poised to fly up imv
this share is under the radar so a decent update to accompany H1 should hopefully see this getting back towards 50p
Confirmation that the H1 results will be out next Monday - it's always good to see companies which produce their results nice and quickly after the period end.
Plus there will be an InvestorMeet presentation at 10.00am for all investors, which in my experience are valuable and work extremely well:
Https://uk.advfn.com/stock-market/london/mti-wireless-edge-MWE/share-news/MTI-Wireless-Edge-Limited-Notice-of-Results-and-In/83051750
MWE were added to Techinvest's Trader Portfolio in this month's latest issue. That's the second time Techinvest have bought MWE into their portfolio in just a matter of months (the first time was in March), so this represents quite a vote of confidence.
They mention the rosy prospects for 5G and water management and irrigation systems, and the low P/E of 13.1 - though not the large cash pile and other tangible asset backing which further solidifies the investment case.
They conclude:
"we feel the shares remain modestly valued and the upward re-rating over the last year has further to run".
These go into treasury - not for cancelation. They purchase them, then sell them to II's at a later date to increase liquidity. I am not sure how much shareholder value is accrued this way - I assume that there must be some but not to the extent that you get when the shares are cancelled.
Good to see today's news that the share buyback programme will continue until next January:
Https://uk.advfn.com/stock-market/london/mti-wireless-edge-MWE/share-news/MTI-Wireless-Edge-Limited-Extension-of-share-repur/82925793
Ticking up again for a second day today, and on relatively small trades, so it appears our seller has hopefully left the building and been cleared out.
All buys today, with the buying price moving up nicely to 33.75p from 32.74p, hopefully indicating that the seller is now out.
Allenby Capital have commented on the news today and conclude as follows:
"Allenby Capital comment:
Mottech enables its customers to significantly increase efficiency through better use of water, fertiliser, energy and labour and also increase yields through professional remote and accurate irrigation. As climate change brings greater variation in weather events and more frequent weather extremes, the need for better management of water resources increases. As a result, Mottech's addressable market continues to expand. Mottech has more than 20 years' experience in the provision of remote control solutions for vineyard irrigation management in multiple geographies including Australia, Italy, South Africa, South America and Israel and Tethys will marketed in these markets as well."
Rivaldo, thanks for the Times info.
A good start to the week with both this and SCE.
There's terrific coverage in today's Times too, with an interesting reader comment that "This app could be used throughout Europe. Spanish growers also have time slots to irrigate".....
Https://www.thetimes.co.uk/edition/business/irrigation-on-tap-benefits-winemakers-in-france-ncj08s5xd
"Irrigation on tap benefits winemakers in France
French winemakers will be able to water their vineyards with a tap of their smartphones thanks to a technology group listed on Aim, London’s junior market.
MTI Wireless Edge, an Israeli manufacturer of antennas that works with Nokia on its 5G network, has signed up 200 vintners in France to use a new wireless irrigation system, called Tethys.
Until recently, irrigation of French vineyards was forbidden or strictly controlled but climate change has forced the authorities to ease restrictions in recent years.
Water to most vineyards in southern France is supplied by local water associations through a network of pressurised pipelines designed in the 1960s, although these can easily be overloaded if too many farmers water their crops at the same time.
To solve this problem, MTI’s Mottech division has created a phone app that allocates a specific time slot when the winemakers can turn on their water supply. The app also lets them select how much water they want sprayed over their fields.
At present, the Tethys system covers about 4,000 hectares of vineyards, although MTI bosses believe that there is potential for this to be extended to 200,000 hectares over the next year or two.
“Mottech’s new Tethys system in the world that enables vineyards to choose in advance the exact time, date and amount of water to be supplied,” Moni Borovitz, the chief executive of MTI, said. “All of this is placing Mottech in a good position to expand its services at a time when climate change is like to force a further softening of irrigation restrictions in France.”
Good news from the French irrigation market - a great start to sales there, with lots more to come in the "short to medium term". And during the pandemic since March too:
Https://uk.advfn.com/stock-market/london/mti-wireless-edge-MWE/share-news/MTI-Wireless-Edge-Limited-Mottech-expands-into-Fre/82882421
"Mottech expands into French Wine Market with new Tethys System
MTI Wireless Edge Ltd (AIM: MWE), the technology group focused on comprehensive communication and radio frequency solutions across multiple sectors, is pleased to announce, that Mottech Water Solutions Ltd ("Mottech"), the Group's subsidiary in the wireless irrigation control solutions sector, has launched a new wireless irrigation solution developed for the French wine market - the Tethys system. The Tethys system was first installed in March 2020 and already 200 French vineyards have become customers.....
..... The response to the launch of the new Tethys system has been excellent. Since March 2020, Mottech, and its local partner, AQUADOC, has now provided the system to four water associations who together provide irrigation water for thousands of vineyards of which 200 have already become customers. Currently, the system is covering 4,000 hectares (40 square kilometers) and it is estimated that there is potential demand for 200,000 hectares in the short to medium term.
Mottech has over 20 years of experience in providing remote control solutions for vineyard irrigation management all over the world, including Australia, Italy, South Africa, South America and Israel. Mottech's Tethys system for rural water distribution management, was developed for vineyards in southern France but will be marketed in other markets as well.
MTI's CEO, Moni Borovitz, said: "Mottech's new Tethys system is the only system in the world that enables vineyards to choose in advance the exact time, date and amount of water to be supplied. A unique feature which is driving demand from both vineyards and water associations. All of this is placing Mottech in a good position to expand its services at a time when climate change is likely to force a further softening of irrigation restrictions in France."
AQUADOC CEO, Lionel Palancade, commented: "French winemakers and water associations are very keen to take control of their own irrigation and water supply management. They believe they are best placed to judge the level of irrigation required for their vineyard. The Mottech system delivers control and accuracy better than any other competing system which is reflected in its evident popularity. In the south of France, with a further 200,000 hectares of land expected to be fitted with the new agricultural hydraulic equipment suited for connection with the Tethys system, Mottech is well placed."
feels like sub 30p is likely here