Anite still "undeniably cheap"

Greek fears may have sent global stockmarkets plunging Tuesday, but Anite is bucking the trend after it said full-year results will match expectations. Anite, which supplies test and measurement software to mobile phone and network equipment manufacturers, ended up with more cash than forecast, too.

Anite had a decent fourth quarter, in line with estimates, which means full-year revenue and adjusted operating profit will also hit targets. We'll find out for sure when the numbers are published on 1 July, but Pannmure Gordon analyst and "Meet the Fockers" fan George O'Connor thinks with these results Anite "should be back 'in the circle of trust'".

There was "good progress" at the old handset-testing business - now Device & Infrastructure Testing - while the October acquisition of the Xceed Data Analytics business made an impact at Network Testing where the new Invex II benchmarking platform offset currency moves. Net cash of £36.9 million exceeded expectations, swollen by the £45 million sale of its travel business a year ago.

"We saw continued momentum in the second half resulting in a good full year result," said chief executive Christopher Humphrey. "The business performed well notwithstanding a typically mixed market backdrop."

"We enter the new financial year with growth opportunities for both of our businesses. These are supported by recent product investments and acquisitions, encouraging activity levels and growing sales pipelines."

Panmure Gordon pencils in sales of £120.5 million for the year to 30 April, and pre-tax profit of £22.2 million, giving earnings per share (EPS) of 5.7p. That gives a price/earnings (P/E) ratio of 15.5 - "undeniably cheap," says Panmure. Strip out net cash worth 12.3p per share, and that drops to just 13.4.

For 2016, the broker looks for £129.4 million of revenue and £24.4 million profit, putting the shares on 14.3 times earnings for that year (including any net cash). However, that's below consensus estimates and O'Connor admits there's "possibly a smidgen of upside to our forecasts".

Panmure thinks Anite shares are worth 142p, while finnCap targets 100p.

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