MTI Wireless Edge H1 2025: defence and 5G fuel a tidy step-up in earnings
MTI Wireless Edge has posted a strong first half, with earnings per share up 17% to 2.50 US cents on revenue growth of 8% to US$24.1 million. Operating profit rose 11% to US$2.5 million and net profit increased 6% to US$2.0 million. The story is clear: defence and 5G demand are doing the heavy lifting, and cash generation has improved markedly.
| Metric (H1 2025) | Result | H1 2024 |
|---|---|---|
| Revenue | US$24.1m | US$22.3m |
| Operating profit | US$2.49m | US$2.25m |
| Net profit | US$1.97m | US$1.86m |
| Basic EPS | 2.50 US cents | 2.14 US cents |
| Gross margin | 32.5% | 31.0% |
| Operating margin | 10.3% | 10.1% |
| Net cash (30 June) | US$5.1m | not disclosed |
| Operating cash flow | US$2.53m | US$1.52m |
| Dividend paid (April) | 3.3 US cents per share (US$2.92m) | 3.1 US cents per share (US$2.75m) |
Where the growth came from: antennas front and centre
Antenna division – double-digit growth, backed by defence and 5G
The Antenna division was the standout. Sales rose 23% year-on-year to US$8.24 million, with particularly strong demand from defence programmes and 5G backhaul. Management highlights a healthy order backlog – exact value not disclosed – and expects momentum to continue as global defence budgets step up.
- 5G backhaul sales jumped 40%, led by India. MTI cautions that order timing in the region can be lumpy, and says 5G sales have slowed slightly into Q3 after a very strong H1.
- Defence enquiries seen over the last two years are translating into firm orders. The global military antenna market is forecast to grow from US$3.62 billion (2024) to US$5.44 billion (2029), a CAGR of 8.4%.
- The ABS antenna solution has moved into production after successful Tier 1 and Tier 2 testing, giving MTI an additional door-opener with major operators.
Segment profit for Antennas rose to US$696k (H1 2024: US$325k), showing good operational leverage as volumes rise.
Mottech (Water Control & Management) – steady progress and H2 catalysts
Mottech revenues increased 8% to US$8.31 million, helped by Israel and the US. The new Italian agricultural project announced in May (initially €1 million) should drive a stronger H2 contribution, and the fountain control solution continues to add to the future services base.
Mottech launched Elite Pro, a smart irrigation controller, with positive early customer feedback. The Arabian Gulf is flagged as a developing growth market. Segment profit was US$814k (H1 2024: US$1.27m), reflecting mix and investment, but the pipeline looks supportive.
MTI Summit (Distribution & Professional Consulting) – top-line dip, operational improvement
Sales decreased 3% to US$7.59 million due to a change in one tethered balloon service agreement. Management says profitability of that agreement was not affected. The core RF and microwave solutions business grew 12% and maintains a substantial order backlog.
Importantly, MTI increased its stake in defence-focused PSK to 60% in May. After a tough 2024, PSK delivered a profitable Q2 and secured several new contracts, positioning it to contribute positively. Segment profit rose to US$708k (H1 2024: US$374k), underlining the operational progress.
Margins, cash and dividends: disciplined execution
Gross margin improved to 32.5% (H1 2024: 31.0%), helped by a richer mix from Antennas and core RF solutions. Operating margin edged up to 10.3% (10.1%). Net margin was 8.2% versus 8.3% last year, held back by higher finance expenses compared with net finance income in H1 2024.
Cash generation was a highlight: operating cash flow of US$2.53 million increased 66% and was similar to EBIT in the period. That level of cash conversion is exactly what you want to see when order books are growing. After paying a US$2.92 million dividend in April, the Group still ended June with US$5.1 million net cash and US$5.50 million of cash and cash equivalents. Inventory and receivables are being managed against rising activity, with unbilled revenue moving up to US$5.00 million as projects ramp.
The buyback programme remains in place until March 2026, with 2,343,000 shares held in treasury at 30 June 2025. The Board’s willingness to return cash via dividends (3.3 US cents per share this year) and the ongoing programme provide support to capital allocation discipline.
Outlook and order visibility: solid, with a few moving parts
Trading into Q3 is described as positive. The Group points to an encouraging backlog and a pipeline of tenders across all divisions. Management is confident in the full year outlook, driven by defence programme activity, 5G backhaul deployments and smart irrigation projects.
What to watch in H2 2025
- Conversion of the defence-heavy order backlog in Antennas to revenue and margin.
- India’s order cadence for 5G backhaul – H1 was strong but near-term visibility can be choppy.
- ABS antenna ramp-up with Tier 1 and Tier 2 customers – a potential incremental growth engine.
- Mottech’s Italian project execution and additional wins in municipal and Gulf markets.
- PSK’s contribution post stake increase to 60%, following its return to operational profit in Q2.
Risks are not swept under the rug. The ongoing conflict affecting Israel is acknowledged; impact on the Group so far has been limited, but prolonged disruption could affect manpower, FX and broader economic conditions. Demand timing in India is another variable to monitor.
Divisional snapshot: scale and profitability mix
- Antennas – revenue US$8.24m; segment profit US$696k.
- Water Solutions (Mottech) – revenue US$8.31m; segment profit US$814k.
- Distribution & Consulting (MTI Summit) – revenue US$7.59m; segment profit US$708k.
All three divisions contributed at a similar profit level in H1, which is encouraging for diversification. Antennas is the growth engine, Mottech provides resilience and services potential, and Summit offers leverage to Israeli defence and RF demand, with PSK as a kicker.
My take: quality progress, powered by defence tailwinds and better cash
This is a tidy upgrade on execution rather than a flashy outlier. Revenue growth of 8% with EPS up 17% shows the benefit of mix, cost control and a lower share count. The move from net finance income to finance expense tempered net profit growth, but cash flow more than made up for it, covering the dividend and leaving the balance sheet in good shape.
On the positive side, the Antenna division’s 23% sales growth, the 40% surge in 5G backhaul, and ABS entering production all support the medium-term growth case. The defence market backdrop is a structural tailwind, and MTI appears well-placed technically and commercially. Mottech’s H2 pipeline and product launches add balance, while Summit’s improving profitability and the PSK stake increase strengthen exposure to defence systems.
On the cautious side, near-term 5G demand in India can be lumpy, and the geopolitical situation in Israel introduces uncertainty even if the business has been resilient so far. Order backlog figures were not disclosed, so investors will be watching for H2 conversion and margin preservation.
Net-net, this looks like a solid half that supports confidence for the year: better margins, stronger cash generation, and multiple growth levers in defence, 5G and smart irrigation. If the order momentum continues to translate into revenue without straining working capital, MTI should be able to keep compounding from here.
