All three divisions of MTI Wireless Edge (LON: MWE) have positive outlooks for the fourth quarter and into 2023. There is particularly strong potential for antennas in India, where an initial order has been won in the fourth quarter.
A recovery in third quarter profit in antennas helped to offset a lower contribution from Mottech water management services, while MTI Summit managed to offset the loss of Russian business with organic growth and the initial contribution from monitoring and control systems business PSK Wind Technologies.
Revenues were 8% higher at $34.8m, while pre-tax profit improved from $3.11m to $3.24m. Tax was higher because currency movements, but there was a small increase in earnings per share.
Net cash was $5.2m at the end of September 2022. Payment terms for PSK are relatively long, while Russian business was paid upfront. This means that there was an increase in trade receivables that held back cash generation. Net cash could be $6.4m by the end of 2022.
Prospects
MTI has an 80%-owned manufacturing business in India and that puts it in a good position to win 5G antenna business. The initial contract will be supplied in the fourth quarter.
Mottech continues to grow, but profit was lower. Price increases will benefit next year’s figures and help profit to recover. Contract wins mean that MTI Summit Full year pre-tax profit could rise to $4.5m this year, rising to $4.9m in 2023. The share price is unchanged at 51p, which puts the shares on nearly 15 times prospective 2022 earnings, while the forecast yield is 4.9%.