Telit Communications PLC Banking covenant and 2017 update (5216H)
13 March 2018 - 6:02PM
UK Regulatory
TIDMTCM
RNS Number : 5216H
Telit Communications PLC
13 March 2018
Telit Communications PLC
Banking covenant and 2017 update
London, 13 March 2018 - Telit Communications PLC ("Telit", "the
Group", AIM: TCM), a global enabler of the Internet of Things
(IoT), has agreed a series of new and amended financial covenants
with its lead financing bank and published an update on financial
results for 2017 as well as for the first two months of 2018.
The new covenants are more appropriate for the Group following
its rationalisation of product lines and costs. In particular, the
covenant, which in broad terms measured the ratio of free cash flow
against debt service obligations, is replaced for 2018.
Telit plans to publish its results for the year to 31 December
2017 in April. The Group has resolved to adopt a conservative
approach in the preparation of its results, and in particular with
respect to the capitalisation of R&D expenditure. This
decision, taken in the course of preparing its results and after a
review of its capitalised R&D assets, will have the effect of
significantly increasing R&D expenditure charged to the income
statement to a level higher than previously forecast.
This, combined with establishing a prudent level of provisions
and other adjustments with its auditors and some component shortage
issues which affected sales in the closing weeks of 2017, leads the
Board to now expect to report revenue of approximately $374-376
million and adjusted EBITDA in the region of $20-23 million
(excluding exceptional costs in relation to the restructuring of
the business). The Group's net debt position as at 31 December 2017
was $30.2 million (2016: $17.7 million).
Trading over the first two months of 2018 has been considerably
stronger than the comparable period in 2017 and ahead of the
Board's early expectations.
Richard Kilsby, Chairman, commented:
"The Group clearly faced a number of unique challenges during
the course of 2017 which have unquestionably affected our financial
performance in the short term. We are resolved to ensure that the
business is placed on a sustainable footing for the longer term and
the Group's financials are recalibrated on a prudent and
conservative basis.
"We are pleased with the outcome so far. We have secured new
covenants with our leading bank and trading in 2018 has started
well. This underpins our confidence that we will deliver
significant revenue growth as well as stabilising gross margins and
improving cash generation in the current financial year."
Enquiries:
Telit Communications PLC Tel: +44 203
Yosi Fait, Chief Executive Officer 289 3831
Yariv Dafna, Finance Director
Tel: +44 20
finnCap (Nomad and joint broker) 7220 0500
Henrik Persson/Giles Rolls (corporate
finance)
Tim Redfern/Richard Chambers (corporate
broking)
Berenberg (Joint Broker) Tel: +44 20
Chris Bowman/Mark Whitmore/Ben 3465 2722
Wright
Instinctif Partners Tel: +44 20
7457 2077
Adrian Duffield/Chantal Woolcock
About Telit
Telit (AIM: TCM), is a global leader in Internet of Things (IoT)
enablement. The company offers the industry's broadest portfolio of
integrated products and services for end-to-end IoT deployments -
including cellular communication modules in all technologies, GNSS,
Wi-Fi, short-to-long range wireless modules, IoT connectivity plans
and IoT platform services. Through the IoT Portal, Telit makes IoT
onboarding easy, reduces risk, time to market, complexity and costs
for asset tracking, remote monitoring and control, telematics,
industrial automation and others, across many industries and
vertical markets worldwide.
# # #
Copyright (c) 2018 Telit Communications PLC. All rights
reserved. Telit and all associated logos are trademarks of Telit
Communications PLC in the United States and other countries. Other
names used herein may be trademarks of their respective owners.
The information communicated in this announcement is inside
information for the purposes of Article 7 of Regulation
596/2014.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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