Poynting highlights strong international growth

Listed group Poynting Holdings (POY) has highlighted strong international growth for both its commercial and defence products, while commercial product sales are booming in South Africa on the back of better mobile broadband offerings, according to CEO Andre Fourie.

The group focuses on three main market segments. Its commercial division manufactures antennas for cellular and wireless data communications; defence and specialised antennas designs and manufactures electronic warfare antennas (DF and Jamming);  and cellular coverage solutions (CCS) focuses on installing booster antennas for end users and designs micro base station solutions for operators.

Fourie explained that the group’s defence and specialised antennas continue to outperform other divisions in the group. “This is the ‘oldest’ product range of Poynting who focused themselves on EW antennas from about 2005,” he said.

“Reputations in this exclusive field is gaining slowly  but the Poynting brand is now internationally recognised as a leader in Jamming, Monitoring and DF antennas. Ultimate customers are mainly from Europe and USA with good interest shown by Middle East and Asia.”

Unlike Poynting’s strong foothold in the defence and specialised antennas market, its CCS division is small and not yet profitable. This is however, not unexpected as the initiative is still in the early stages of market development.

The economic downturn has also hurt Poynting’s international sales of commercial antennas, but this is changing, according to Fourie.

“The normal commercial antenna range has seen a dramatic reduction in European and international sales in 2009/2010,” Fourie said. “New integrated WiFi solution has also hurt sales of Poynting WiFi based product range.”

“International sales are now showing healthy increases and good growth in the cellular/3G market is supporting commercial sales. This division has returned to low levels of profitability after some 2 years of losses,”  Fourie said.

Most of Poynting’s growth in 2011 came from its international commercial and defence products while local commercial product growth also helped the company’s bottom line.

The year ahead

Fourie says that the group aims to return to higher growth that was experienced in the prior two years. “We intend to make some small acquisitions where these can bolster product range and/or give better access to other markets,” he said.

“We foresee continued growth in the cellular data market and would like to be a driver in establishing cellular (wireless) data as a hardcore ‘fixed internet’ solution in SA, Africa and developing world as opposed to most of these products which currently cater for the mobile/nomadic market.”

Fourie is confident that Poynting’s “innovative offerings” in the micro base station market will show high growth since it is “clear that capacity constraints will demand a new generation of low cost high density cellular data base stations”.

“From many lessons learnt in the WiFi base station business we believe we can become leaders in providing and designing a complete ‘mind-shift’ in what comprises a cellular data base station for the future,” Fourie concluded.

The group recently advised (3 February 2012) that it expects earnings per share and headline earnings per share of 1.42 cents for the six months ended December 2011, compared to the previous corresponding period’s loss per share and headline loss per share of 3.15 cents and 1.85 cents respectively.

“The range, within 20%, by which the earnings per share and headline earnings per share will increase cannot be determined with a reasonable degree of certainty at this stage,” it said.

Poynting expects to publish its results on about February 29.