Anite boosts profitability but loses CEO

(By Anthony Miller) Travel Systems and Wireless Testing software player, Anite, saw margins expand 8 points (to 26%) in its first half (to 31 Oct.) though revenues slipped 3% (to £47m). Both top and bottom lines got a helping hand from weak sterling. Anite chairman Clay Brendish also announced that CEO Steve Rowley is to step down at the end of the year, with CFO Christopher Humphrey to take the reins. More after the briefing.

Update

In the analyst briefing, incoming CEO Chris Humphrey reiterated that Anite’s Wireless division is the true heart of the much slimmed-down business, leaving the obvious implication for its more profitable but smaller Travel division. Anite is mainly pinning its Wireless division growth hopes on the transition to LTE (4G) mobile networks. To be frank, we are not in any sort of position to judge whether LTE will emerge as the winner in ‘4G-wars’, but Anite feels that competing technologies such as Wimax will only secure a small share of the eventual market. The bigger question is the uptake rate of 4G technologies to drive demand for both Anite’s handset and network testing products. Management expects little 4G business this FY, but hopes next year will see the technology take off, a tough call in the current downturn. Another factor we think may influence demand for Anite’s Wireless products is the increasing propensity for handset and network equipment manufacturers to outsource R&D and testing. This is an area Wipro in particular has made its home, but earlier this year we saw Nokia Siemens Networks outsource its R&D centre in Düsseldorf to TCS and most recently, Alcatel-Lucent outsource its Nuremberg R&D centre to Harvey Nash. We want to see Anite successful in the highly strategic Wireless market, and hope that Chris Humphrey will continue to keep the flag flying for UK software technology.

Post script. I must have had a touch of Indian sunstroke when writing my comment on Anite earlier this month (see here), which implied that Anite’s Wireless business directly competed with Indian SIs’ wireless testing services. I am delighted to set the record straight that this is not the case.