(Alliance News) - Telit Communications PLC on Friday said it expects a "minimal impact" from the coronavirus outbreak and is planning an up to USD20 million share buyback programme.
Shares in Telit were down 8.6% at 115.00 pence in London in afternoon trading.
Telit offers products and services aimed at "internet of things" enablement. The internet of things allows everyday objects to connect to the internet and send data.
So far, Telit said there has been "minimal impact on production due to the ongoing covid-19 situation" and it is still confident of meeting board expectations for 2020 as a whole.
Telit said its supply chain involves "multiple contract manufacturers covering "a wide geographic footprint" but its main supplier is in China where the outbreak originated. However, said supplier resumed its operations midway through February while the rest of its suppliers remain "fully operational".
The company said it is working with all of its partners and customers so as "to avoid any supplier chain disruption" if raw materials availability becomes an issue, and is closely monitoring the situation.
At the end of 2019, Telit's net cash stood at USD48.2 million, the company having sold off its automotive division, Telit Automotive Solutions NV, for USD105 million and repaid bank loans.
In its annual results, due the week of March 16, Telit will outline plans for the return of cash to shareholder through a buyback programme. It will repurchase as many as 10% of its outstanding shares or up to USD20 million worth of shares.
Telit's 2019 results are to be in line with its January 14 trading statement, wherein the company said that its total revenue, including two months contribution from the automotive business sold in February 2019, is expected to be USD391.0 million. This would be an 8.5% fall from 2018 where revenue came in at USD427.5 million, which included full year revenue from the automotive business.
Adjusted earnings before interest, tax, depreciation and amortization, excluding the automotive business, are to be in range from USD37.0 million to USD40.0 million, compared to USD30.1 million in 2018, including the automotive business.
Chief Executive Paolo Dal Pino said: "We are fully focused on ensuring that the impact of the global covid-19 situation continues to have minimal effect on our production, customers and of course our employees around the world. Telit expect to continue improving its financial performance, with a central focus on profitability and cash generation, and we enter 2020 with strong momentum to capitalise on growth opportunities in the [internet of things] market."
By Anna Farley; annafarley@alliancenews.com
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