Interim Management Statement

RNS Number : 0397Z

Anite PLC

15 September 2009

Tuesday, 15 September 2009

Anite plc

Interim Management Statement

Anite plc ('Anite' or 'the Company'), the leading provider of software solutions to the international wireless and leisure travel industries, today announces an Interim Management Statement, covering the period from 1 May 2009 to 14 September 2009 ('the period'), ahead of its Annual General Meeting being held later today.

Trading

As indicated at the time of Anite's final results in July 2009, the Board expects the current trading year to be challenging. Profit in the first half is expected to be significantly lower than the record first half profits that were reported in the prior year.

Trading in the period ended 31 August 2009 has followed this expected pattern, with less favourable currency movements and seasonality than last year.

The order book stood at approx £57.6m as at 31 August 2009, lower than at the same time last year, reflecting the customer changes in Travel, transition in Wireless and the difficult economic conditions affecting the capital expenditure budgets of some customers.

Wireless

Revenues in Handset Testing have been affected by declining demand for older technology prior to the launch of the new 4G product. This, together with the customer led investments in LTE, has also affected profitability. Order intake in Handset Testing tends to be dependent on the latter weeks of the half year periods, reflecting its normal sales cycles.

The longer term outlook for 4G (LTE) testing has continued to improve during 2009. Over 60 network operators have now committed to their roll out strategies, double the number compared to a year ago. This momentum is expected to provide impetus to sales opportunities during Anite's final quarter.

We continue to make very good progress with our software development programme for 4G (LTE) testing and we are in close collaborations with certain key industry leading customers. Although there has been some slippage, we are also working closely with our hardware partner, Agilent, on the development of the key hardware component of our 4G offering. Our pre-market platform continues to act as a place holder for a number of LTE customers. As previously stated, the nature of this leading - edge development programme means that risks remain around the timing and delivery of the completed offering.

We also strengthened the Handset Testing business during the period with the appointment of a new global sales director. In addition costs have continued to be reduced in light of the challenging trading conditions.

Network Testing has also experienced challenging market conditions continuing the trend of the second half last year; the visibility of sales opportunities and customers' budgets has been less certain and this has reduced revenues and profitability compared to last year, which was a very strong comparative period.

Travel

As expected, Travel has been impacted by the full year effect of the one-off customer events previously reported upon (principally being the loss of the Norwich Union contract, a non-travel legacy customer, the non-repetition of the benefit from the early settlement of the MyTravel contract and the XL administration). These have reduced Travel's revenues and profitability compared to last year. This has been partly mitigated through new business and the migration of existing customers from ATOP to @comRes.

Good progress continues to be made with the TUI Group and other key UK and international customers. There is good interest in, and a strong international order pipeline for, @comRes reflecting the strong business case it represents for vertically integrated customers who need to reduce their processing and distribution costs. Due to the high value and mission critical nature of its work, Travel's order intake tends to be focused on a few significant long term orders and is characterised by lengthy sales cycles.

Financial position

Anite continues to report a robust financial position. Net cash as at 31 August 2009 was £26.2m (30 April 2009: net cash of £27.3m). The Company also has additional funds available in the form of a £20m revolving credit facility and a £5m overdraft facility, both of which are undrawn and the directors believe are appropriate for the business's expected future requirements.

The interest income on the Company's cash balance continues to be very modest due to lower deposit rates, whereas the interest expense on the Company's term loan is effectively at a fixed rate; this has resulted in there being a net finance charge in the period.

Management update

In August 2009, we were pleased to announce that Richard Amos had agreed to join the Board of Anite as Group Finance Director. It is anticipated that Richard will join Anite in November 2009.

Richard is currently Group Finance Director of Agilisys Holdings Limited, a private company specialising in IT outsourcing and services. Previously he was Group Finance Director at Retail Decisions PLC and Vega Group PLC. Richard is a graduate of Cambridge University in Management Studies and Engineering and he qualified as a chartered accountant with Ernst & Young in 1990.

Commenting, Christopher Humphrey, Anite's Chief Executive said:

'As we expected, trading for the year to date has been challenging. The investments we are undertaking this year are however building strong foundations for future profitable growth.

'We continue to believe that the longer-term outlook for our new travel system and its international market and for the growing adoption of LTE technology is very positive.'

A conference call for analysts and investors will be held at 8.30am today; please call or e-mail Olivia Evans at Smithfield for details (020 7360 4900 or oevans@smithfieldgroup.com)

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