Equipment maker NetComm Wireless (NTC) has reiterated its prediction that current year earnings will surge six-fold while revenue will jump 40% in the current financial year as its change in business focus pays off.
The hardware company made a strategic decision last year to concentrate on the industrial machine-to-machine (M2M) equipment market instead of the mobile and home broadband equipment market, which covers 3G/4G and ADSL technologies.
Supplying the wireless communication components to the M2M market, an area that covers smart power meters and mobile payment solutions, is a more defensive business with more predictable and consistent revenue streams.
NetComm says this is an important year of transition for the company and believes full-year sales will come in between $58 million and $63 million in 2013-14 due to the change in product mix the M2M business contributes 55% of full year revenue compared with 20% a year ago.
Management also reiterated its earnings before interest, tax, depreciation and amortisation (EBITDA) goal of $4.6 million to $5.1 million for the year versus an EBITDA of $803,000 for 2012-13.
Shareholders that participated in Netcomms last capital raising will be hoping that the news will give the stock a boost given that it is trading below the new share offer price of 25.5 cents.
NetComm, which is part of the Uncapped 100, opened half a cent higher at 24.5 cents this morning.