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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
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."
Allenby Capital have retained their 75p target price and summarise:
"MTI Wireless Edge Ltd* (MWE.L, 42p/£37.1m)
Contract wins across PSK and Antennas (07.05.24)
• Three orders totalling c. $3m, with the bulk to be delivered in FY24.
• Two contracts received by PSK, part of the MTI Summit division, from two Israeli customers for the provision of services and the installation of systems for the Israeli government, PSK's largest client and a long-standing customer. The other received by the Group's Antenna division is for military antennas from an Israeli system house and represents a repeat order.
• Forecasts and 75p/share fair value unchanged.
Allenby Capital comment:
The contract wins demonstrate the benefits of MTI's long-standing relationships with its customers and the quality of its product set, based on its comprehensive communication and radio frequency technology stack. Defence spending continues to increase worldwide and also in MTI's domestic market and the wins help to underpin our FY24 forecasts."
While this is an encouraging post, for which I thank you, my concern is the political ramifications of the Gaza conflict on MWE long term. While the immediate conflict may soon be over, MWE, as an Israeli company, might be seen as toxic by several customers (or potential customers) for quite some time. This could adversely affect future earnings. Moreover, while the current Gaza conflict could soon end, what might be called the "Gaza question" is unlikely to be settled fully, and hence there is the potential for flare-ups in the (probably not too far distant) future. On the flip side, the US (and some lesser members of NATO) is not likely to take any such tarnished view of MWE so perhaps I am being over-pessimistic. Any thoughts would be of interest.
Up nicely today, rising 3p already.
Stuartrm, points absolutely noted and fair - my opinion is that, for example, MWE supply almost all the top global telcos, and I doubt whether these global behemoths will change their purchasing patterns from long-term, reliable suppliers for concerns which frankly have been around for many years now and haven't stopped MWE growing steadily and consistently.
In addition, both locally and globally, defence expenditure is ramping up hugely. MWE have already evidenced via RNS's that they're benefiting from this, and there are many countries where there must be many excellent prospects who awill set aside Gaza conflict questions - for example India, where MWE have been setting up a local office and are primed for large 5G contracts.
Happy to keep holding, In a way I wish I had added, and probably will.