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1% revenue growth is pretty poor given inflation at 10%, and most of the profit growth came from interest on the huge cash balance they hold.
Shore Capital also have a 90p price target based on "conservative" forecasts.
They conclude:
"Outlook and valuation
We have consistently flagged since we initiated research coverage in May 2022 that MTI’s strong financial platform provides a base to grow sales both organically and through acquisitions, with any new business incremental to margins/profits. In our view, the group has demonstrated this with the organic growth in Summit in 2022 boosted by the PSK acquisition, while the Q1 FY23A results show good progress for Mottech and Antennas.
In the note that accompanied the FY22A results in March, we highlighted that each of the divisions has growth drivers with, in our view, Mottech particularly well placed to potentially see stronger sales than we forecast. as its software improves the efficiency of irrigation systems, while reducing the cost of operating them. We also expect to see good demand for the defence-related products and services of Summit/PSK. Finally, 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.
We maintain a 90p fair value on the basis of a DCF analysis, which is corroborated by MTI achieving an FY23F EV/EBITDA multiple of 11.2x (the average of our peer group)".
Oh to be a dreamer.... Every thing apart from this is covered in blood... Intend to hold this and hopefully take another dividend later in the year...
Allenby Capital have retained their 90p fair value price target this morning.
With 1.01c EPS in the usually much quieter Q1, MWE have made a very good start to 2023 and look likely to beat the forecast of 4.28c EPS for the year imo.
EPS is up 14% and PBT up 9% in the normally quieter Q1, with the cash pile up to $8.5m (the divi being paid in April) and bringing in additional interest receivable, plus improved margins also helping the cause.
Each of the 3 divisions is performing well and there's confidence for the outlook in all of them. Water, 5G and defence are all great areas to be in and should continue to be so in the short and long-term.
There's also a notable mention of growth being acquisition-led as well as organic:
Https://uk.advfn.com/stock-market/london/mti-wireless-edge-MWE/share-news/MTI-Wireless-Edge-Limited-Q1-2023-Financial-Result/91085260
New Mottech press release promises a "gamechanger" for the water industry:
Https://mottech.com/news/andromeda-water-distribution-system-revolutionizing-water-management/#
Extracts:
"May 3, 2023
Revolutionizing the Water Distribution Process with Andromeda
Water is a scarce resource that needs to be managed efficiently to ensure sustainable use. The Andromeda Water Distribution System, developed by Mottech, is a revolutionary add-on module that enables the monitoring and control of water distribution systems irrespective of the number of consumers, valves, meters, or size of the distribution area. The Andromeda system presents a significant breakthrough in terms of water providers’ capabilities to meet consumer demands easily and efficiently and maximize available water resources, energy, and labor."
"In conclusion, water management is critical to ensuring sustainable use of this scarce resource. The Andromeda Water Distribution System, based on the IRRInet platform, is a revolutionary add-on module that enables water providers to manage their resources more effectively and meet consumer demands efficiently. With its user-friendly interface and automatic control of valves, the Andromeda system is a game-changer in the water management industry, providing water providers with a unique solution for managing online water orders and maximizing available water resources, energy, and labor."
I am grateful for the small tick up..
Good to see a sizeable share buyback of 100,000 shares at 51.75p - shows confidence:
Https://uk.advfn.com/stock-market/london/mti-wireless-edge-MWE/share-news/MTI-Wireless-Edge-Limited-Transaction-in-Own-Share/90919566
Brief update today from Allenby Capital with a 90p price target:
Https://wp-allenby-2020.s3.eu-west-2.amazonaws.com/media/2023/04/Allenby-Capital-TMT-Update-24.04.23-MWE.L-TRAK.L-TERN.L-CLCO.L.pdf?c3592=on
"Allenby Capital comment:
MTI's Mottech subsidiary has a number of long-term customers in the public sector where it helps customers reduce costs and water usage. Water scarcity and the smart use and efficient management of this vital resource remains a key global consideration and Mottech has demonstrated the ability to sell into multiple geographic markets but also expand into other markets (e.g. viticulture, fountain management). Mottech offers a proven solution based on Motorola's IRRInet control, monitoring and communication technologies. No change to forecasts or 90p/share fair value, equivalent to an FY24 EV/EBITDA of 13.0x"
Yep. The good news keeps coming but the prospect of 90p seems miles off. The divi keeps me here as I made the decision
that divi's are a saving grace...
Shore Capital's update today reiterates their 90p fair value target price and notes that their forecasts are conservative:
"Conservative forecasts:
We have consistently flagged over the last year that MTI has a very strong financial platform and seeks to grow sales both organically and through acquisitions, with any new business incremental to margins/profits. At the time of the FY22A results in March, we maintained our group forecasts for FY23F and FY24F and introduced numbers for FY25F. We continue to forecast sales and profit progress in each forecast year. Obviously, we have not assumed any further acquisitions in our forecasts, so given the company’s record of earnings-enhancing deals, we would view any M&A as likely to boost forecasts and shareholder value.
Outlook and valuation:
In the note we highlighted that each of the divisions has growth drivers with, in our view, Mottech particularly well placed to potentially see stronger demand than we forecast for its water management and control software as demonstrated by today’s contracts. Typically, the software improves the efficiency of irrigation systems, while reducing the cost of operating them. Summit/PSK had a strong FY22 and we would also expect to see good demand for its defence-related products and services Finally, 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. We maintain a 90p fair value on the basis of a DCF analysis, which is corroborated by MTI achieving an FY23F EV/EBITDA multiple of 11.2x (the average of our peer group)."
https://uk.advfn.com/stock-market/london/mti-wireless-edge-MWE/share-news/MTI-Wireless-Edge-Limited-Contract-Wins/90798343
Good to see - lovely long-term recurring income over 5 years is highly valued by the City.
And it shows the trust the municipality has in Mottech/MWE.
MTI Wireless Edge will be featured on Mello tonight on the BASH session (Buy, Avoid, Sell or Hold)
Https://melloevents.com/mm170403/
Use code TwitMM50 for half price tickets
News from Mottech:
Https://mottech.com/news/implementation-of-mottech-icc-pro-autopilot-in-automated-farming-practices/#
"Implementation of Mottech ICC Pro Autopilot in Automated Farming Practices
March 26, 2023
Discover the power of our innovative ICC Pro Autopilot system that combines advanced irrigation control with accurate irrigation recommendations, leveraging AI, machine learning, and advanced sensing systems to revolutionize automation in agriculture.
How does the Mottech ICC Pro Autopilot system transform automation in agriculture?
Introduction to Mottech ICC Pro Autopilot
The Mottech ICC Pro Autopilot is a groundbreaking technology that combines advanced irrigation control with accurate irrigation recommendations. This unique solution integrates irrigation and sensing systems in a single-screen display, providing real-time irrigation operation based on sensing system recommendations. By combining AI and ML, ICC Pro Autopilot recommends the exact amount and timing of irrigation to maximize agricultural production.
Features and Benefits of ICC Pro Autopilot
Based on the collected data analysis, the ICC Pro Autopilot system establishes an irrigation protocol for all types of crops and soils. With a safety mechanism that prevents incorrect water usage, the system ensures efficient and sustainable irrigation management. With a user-friendly app, farmers can remotely monitor root activity and apply smart irrigation, making agriculture more efficient and accessible.
etc"
This pays a good dividend and has excellent growth prospects. It has been wallowing a bit recently so I added... Happy to wait for it to rise....
Gone ex-div today which explains the early markdown. Mind you, looks like a few small sellers were either in it only for the divi, or were far too easily misled by that early markdown. IMO the ex-div day is a good time to top up at these levels rather than sell, but WTFDIK :o))
Lucas01, from my records it seems 20% overseas tax is deducted from the remittance of MWE dividends.
looking at buying into MTI. Can anyone tell me, with MTI being based in Israel, are the dividends subject to Israeli 25% witholding tax?
Shore Capital have retained their 90p target here. After this week's rise MWE are still only on a cash-adjusted P/E of around 12.
They summarise:
"Outlook and valuation:
Each of the divisions has growth drivers with, in our view, Mottech particularly well placed to potentially see 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. Summit/PSK had a strong FY22 and we would also expect to see good demand for its defence-related products and services Finally, 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. We maintain a 90p fair value on the basis of a DCF analysis, which is corroborated by MTI achieving an FY23F EV/EBITDA multiple of 11.2x (the average of our peer group). HOUSE STOCK"
I've just come across this MWE news wire item which hasn't been posted before and introduces the new patented ABS antenna system for 5G etc - note again the field trials with three tier-1 customers:
Https://uk.advfn.com/stock-market/london/mti-wireless-edge-MWE/share-news/Expanding-E-Band-MTI-Wireless-Edge-LTD-Launches/90294179
"MTI Wireless Edge Ltd. (AIM: MWE). is proud to announce the launch of its newest patented product, the ABS®. This innovative E-band antenna system is specifically designed to provide robust communication solutions in harsh weather conditions, such as high winds and pole vibrations.
The ABS® compensates for tower vibrations and sway, ensuring stable communication even in the most challenging environments. This makes it an ideal solution for 5G backhaul in particular allowing an extended range for E Band links.
The ABS® is currently in field trials with 3 Tier 1 customers and is already operating for several months providing a stable E Band link of over 12 kilometers.
"We are excited to introduce the ABS® to the market," said Dov Feiner, General Manager of MTI's Antenna Division. "It's a game-changer for companies that require reliable communication in harsh conditions and allows faster penetration of 5G networks where fiber isn't readily available. We are confident that our patented ABS® will be a valuable asset to our customers."
as a Buy overnight - - here's a link:
Https://www.investorschronicle.co.uk/ideas/2023/03/13/a-lowly-rated-technology-group-offering-a-prospective-5-5-yield/
Good to see also today's RNS noting that MWE have sold their 150,000 treasury shares at 50p. A nice boost to MWE's cash, and presumably an institutional holder has increased its stake.
The Invwstor Meet presentation is well worth a listen. Moni sounds as bullish as I've ever heard him in reiterating the opportunities in 5G, water management and expanded defence spending budgets.
A couple of points:
- Mottech's smart cities solution is being expanded from fountains to lighting etc given the information it provides from its sensors. Once this has been completed in the first munipality being finished now, it can be rolled out and duplicated
- in 5G, MWE are now working with 5 of the top 7 leading OEMs
- the ABS antenna solution is being trialled with several customers and shoudl be fully commercialised early next year
- more acquisitions are being considered and can be financed internally across any or all of the three divisions
Just always happens. Good results on a bad day... The sun will come out tomorrow..
Both Shore Capital and Allenby have retained their 90p fair value for MWE's shares.
I added a while back. No intention of selling. Growth company.
The 2022 results are nicely ahead of both Shore's and Allenby's expectations.
4.21c EPS compares to forecasts of 4.1c, and 3c dividend is nicely in line and represents a 5.2% yield! The results are even better considering the impact of the withdrawal from Russia.
Good to see the cash pile up over 50% since H1 at $8.1m.
All three divisions are trading well and each have great prospects in defence, 5G/antennas and water management.
The outlook is perhaps unusually bullish, slightly more so than in MWE's usual conservative style?
"Outlook
The conflict in Ukraine has led directly to a significant increase in defence budgets. This increase in spend is yet to come through and with approximately 37 % of the Group's sales being defence related, it is likely that this trend will have a positive impact on the Company's financial performance in 2023.
Overall, MTI remains well positioned across three divisions, with each division backed by strong macro trends underpinning their future prosperity. The first two months of 2023 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."
Nice recovery today. At 49.5p MWE are on an ex-cash P/E of only 12.1.
The results will be out soon on March 13th. Last year there was a trading statement on 14th February noting that profit would be "marginally lower" than expectations. This year there's been no such update, which logically means that MWE are trading nicely in line with expectations.
And the fact that MWE are announcing on a Monday morning is also hopefully a good sign :o))
Good post Hadchoaharrier, thanks.