Poynting talks up LTE micro base stations
JSE-listed Poynting Holdings says it continues to invest in its entry into the cellular micro base station market and has established the CCS division for this purpose.
The group has also set its sights on a potentially lucrative digital television market as South Africa and Africa are required to convert from current analogue to digital television by 2015.
In results for the six months ended December 2012, the group reported a rise in revenue to R41.948 million, from R38.8 million in 2011.
Group earnings before interest, taxes, depreciation and amortisation (ebitda) for six months increased by 10.8% to R6.44 million, but operating profit slipped to R2.487 million, from R2.766 million before.
Diluted headline earnings per ordinary share advanced to 2.47 cents, from 2.15 cents in the prior reporting period.
Poynting designs, manufactures and supplies antennas and telecommunication products to the cellular, wireless data and defence markets
The group said that revenue from its commercial division declined by 3.12%, however the ebitda contribution increased by 260% to R2.6 million.
“Our defence division´s growth in revenue continued during this period. Defence revenues increased by 20.64% and ebitda remained at R5.48 million compared to the previous comparative period,” Poynting said.
The defence division is focused on the electronic warfare market which comprises of monitoring, jamming and direction-finding antennas.
CCS
The group said its CCS division, with products aimed at the base station market and developed to provide coverage to cellular network operators, made an ebitda loss of R1.63 million.
“CCS expenditure relates to investment in product development, new technology and marketing while actual income is limited to trial installation and prototypes for network approval and customer acceptance.”
Poynting said it expects increases in these types of orders in the second half of the year, which is expected to reduce the losses that have been incurred. Real profitability is only expected in the 2014 financial year.
The group pointed out that product development is done in close collaboration with large operators including multi-national cellular companies who are leaders in this area.
“Our new 3rd generation LTE billboard micro base station is generating considerable interest and evaluation and sample units have been delivered.”
“While cooperating with potential customers Poynting has funded and retained full IP ownership of these products. A number of patents and registered designs have also been filed to protect this IP,” Poynting said.
Prospects
The group said its defence division´s order book mid February 2013 is at its highest point ever with good order intake from a variety of mainly international, but also local customers.
“Second half performance will be limited by ability to execute orders which has exceeded expectations. The Radiant Antenna product range is also making a positive impact on order intake,” it said.
Poynting said its CCS Division has moved to 3rd generation LTE micro base station technology, due to the requirements of one of the largest multi-national cellular companies.
“This billboard sized device encompasses a number of patented technologies and potential demand for these base stations will be millions of units per year over the next five years. Poynting hopes to secure a niche position in this rapidly expanding market,” it said.
Digital Television
Poynting said that while it has previously avoided the television antenna and accessories market.
However, via partners in this area and incentives by the South African Department of Communication’s digital migration project, it has made several breakthrough inventions in terms of set top boxes, installation of DTV systems and DTV antennas and antenna manufacturing.
The group said it has filed various patents and designs and have developed some new software and systems to enable successful rollout of DTV to consumers.
“This IP has the potential to deliver significant future returns and we have started a new business unit to develop and exploit this IP and market opportunities.
No trading has yet taken place in this area with activities mainly in R&D, product development and marketing. Management is encouraged about the potential value offered by applying Poynting IP and knowhow to this new DTV market.”
Poynting said it has undertaken a growth initiative involving acquisitions, business expansion and organic growth aimed at significantly increasing turnover in the next 3-5 years.
“Poynting historically has had a stronger second half performance and this year indications, market and strong order books are all indication that we should improve on first half performance,” the group said.
In lunchtime trade on the JSE, shares in Poynting advanced 5 cents or 7.14% to 75 cents on the JSE, giving the firm a market cap of 70.95 million.
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