Further progress at MTI Wireless

MTI Wireless Edge (LON: MWE) grew revenues of each of its three divisions and two of them made a higher profit contribution. An initial contribution from last year’s acquisition, offset the loss of Russian distribution business.

In 2022, group revenues improved from $43.2m to $46.3m, while underlying pre-tax profit rose from $4.04m to $4.32m. The total dividend is 3 cents a share. Net cash was $8.14m at the end of the year. That cash pile will grow unless more acquisitions are made.

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The distribution and professional consulting division has become the largest profit contributor. Recent acquisition, communication and monitoring systems developer PSK WIND Technologies won a large order during the year and there are other potential contracts on the horizon. International spending on defence is increasing and that should boost this part of the company.

The profitability of the Antennas division is recovering after a first quarter loss. Sales of 5G antennas are building up and there was a boost from an upturn in demand for older technology.

The odd one out is Mottech, the water distribution and irrigation technology business. Revenues increased but gross margins and profit fell. Price increases have been made and the full benefit will come through in 2023.

The share price has been drifting lower since last summer. It recovered by 3.5p to 52p. A pre-tax profit of $4.79m is forecast for 2023, which would put the shares on 15 times prospective earnings.

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