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MTI Wireless taps into world's demand for water and data

Markets for both antennas and water systems are set to grow strongly over the coming years
Crops
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Watering by smartphone

No prizes for guessing radio communication is a major part of MTI Wireless Edge Ltd’s (LON:MWE) business.

Military and commercial antennas are one of its largest revenue earners but less obvious and equally important are water management systems.

WATCH: MTI Wireless Edge merger gives immediate boost to profit and performance

Markets for both antennas and water systems are set to grow strongly over the coming years.

Water is becoming increasingly valuable as climate changes make it a scarce resource while in wireless, MTI is readying for the advent of 5G technology.

Moni Borovitz, finance director of the Israeli firm, says demand for water systems is coming from areas he would never have previously expected.

Having traditionally worked in areas such as Australia, South Africa and China, the company recently picked its first order from Germany and is seeing interest from the UK.

“Everybody is looking to manage water,” he says.

First in Mozambique

A new contract has also just been won in Mozambique, the first time that it has supplied water systems there and where there is potential for US$60mln of sales.

MTI supplies the whole water management system with its antenna and software embedded into a Motorola unit, for which it has exclusive use.

Dual-way capability means, for example, a farmer can decide how crops are irrigated from a hand-held device.

Everything that the crops need can be organised on a mobile, says Borovitz, and that means a farmer can focus on the most fertile areas, resulting in more crops of a higher quality.

As the world’s population grows and feeding it becomes a higher priority, Borovitz can only see demand rising further.

But it’s not only farms, the gardens and opens spaces tended by municipalities and councils are another place where water management is becoming critical.

MTI’s system are ubiquitous and can even tie in with weather stations or with probes that go into plant roots to get data and instruct the system based on the information.

“We give a full picture, an automatic pilot.”

5G awaits

In antennas, the split is 70% commercial and 30% military.

The aim is to help solve the growing capacity shortage, which is only set to increase as data hungry 5G phones becoming more prolific.

MTI supplies the OEMS that supply the network operators and several 5G solutions are with customers waiting for full system roll-outs.

In military, meanwhile, MTI has seen an uptick in orders for disposable systems that are used once and need replacing.

A distribution and re-selling operation of wireless components into Israel is another small but important part of the business.

Israel is at the forefront of tech developments and all of the global tech giants have a presence here, says Borovitz.

MTI has seen some ‘some nice design wins’ and these can then be rolled out to a much wider global audience. 

Merger benefits

AIM-listed, MTI saw revenues increase by 32% year-on-year to US$25.9mln for the nine months ended 30 September 2018.

A merger with its major shareholder MTI Computer in August gave the numbers a lift, otherwise, sales were 2% higher organically.

Operating profit in the period increased by 66% year-on-year to US$1.9mln and was up 7% organically.

Earnings per share rose by 10% organically.

Zvi Borovitz, MTI Wireless’s chairman, said the merger would lead to cost-savings and efficiencies.

"We are happy to have achieved enhanced profits from the merger, including at the earning per share level," he added.

At a price of 18.5p, MTI Wireless currently is valued at £16.1mln.

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