By Najat Kantouar
Alphawave IP Group has reported a swing to pretax loss for the first half-year with low margins and higher costs, despite revenue growing, but said it expects higher profitability for the second half.
The U.K. wired connectivity solutions provider company said on Monday that pretax loss for the six months ended June 30 was $11.16 million compared with a profit of $22.2 million for the same period a year earlier.
Revenue rose to $187.2 million from $57.1 million driven by the acquisition of OpenFive and organic growth.
However, gross margin dropped to 44% compared with 97% because of the diversification of the business into custom silicon development and silicon products. The company said that it has inherited a number of contracts with gross margins below the group targets through the acquisition of OpenFive.
Adjusted earnings before interest, taxes, depreciation and amortization–a company-preferred metric–was $32.4 million compared with a $23.2 million reflecting a change in business mix and R&D investment.
Shares at 0742 GMT were down 9.0 pence, or 6.1%, at 138.0 pence.
Write to Najat Kantouar at [email protected]
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