At a recent event held to highlight its latest financial results, Poynting, a leading producer of specialised antennas and telecommunication products to the local and international cellular, wireless data and defence markets, outlined an aggressive growth plan which aims to take revenue to R1 billion over a three to five year period.
CEO Andre Fourie said that this growth will be in the form of acquisitions of new businesses, including strategic acquisitions to expand current business divisions in terms of product and distribution, and investing into completely new business areas. “Our recent binding Heads of Agreement to acquire Aucom will considerably enlarge the Company and gives us further diversification in terms of products and markets,” he stated. “We are well positioned to realise enormous growth potential across all our business divisions.”
The company’s latest annual financials showed an increase in net profit after taxation from R7,233 million in 2012 to R9,840 million in 2013 while basic earnings per ordinary share increased from 8,18 cents to 10,48 cents per share. Commercial division revenues increased by 10,97%, showing the benefits of mass production in China, while defence division revenues increased by 36,57%.
The path to growth
A local company with strong research and IP, including 49 patents, designs and trademarks, Poynting has tapped into export markets including Europe, the United States of America, Australia, the Middle East and Asia with market-leading antenna technologies. Fourie said he believes the export numbers are still low and that considerable growth in export sales is possible given the size of the international market for both commercial and defence products.
Poynting’s commercial antennas are used with or within cellular and wireless data end-user equipment, enhancing Internet access and increasing throughput while also making connections more consistent. Technologies include GSM, HSPA, 3G, 4G, LTE, WiFi, iBurst and related technologies.
Fourie highlighted that the market for these antennas is rapidly increasing with cellular data revenues growing by between 20% and 50% and actual data usage and devices roughly doubling annually. “Especially in Africa, uptake of Internet access is growing massively,” he said.
“Poynting antennas find a particular niche in fixed wireless (office or home Internet) usage and machine-to-machine (M2M) market applications, such as vehicle tracking, credit card terminals, remote electricity and a host of other telemetry applications. Many new applications appear as the cost of connectivity drops – this includes home alarm systems, irrigation, video surveillance, anti-poaching detection devices and vending machines.”
The company is further entering the cellular micro base station market, supplying network operators who need to provide at least 10 times more base stations to provide capacity for data demand. Fourie said that, as low cost and innovation in size and shape are crucial, the company’s subterranean base stations and new LTE billboard micro base stations are generating considerable interest.
The growth of Poynting’s defence division came against a backdrop of lower international spending on defence, and was achieved via a substantial increase in international customers in the past financial year. The acquisition of Radiant Antennas enabled this division to further extend its focus beyond the electronic warfare market to the larger defence communication market, selling to military system integrators and specialised distribution partners.
Fuelled by new innovations
Joint business endeavours between Poynting and acquisition Aucom are expected to bear fruit in a new market area for Poynting as African countries convert from analog to digital TV. Poynting has developed a digital TV antenna for domestic use, the DigiAnt, which it will both manufacture and licence for manufacturing internationally. Its low production costs and a packaging volume make it attractive in markets wishing to promote local production.
A new solar-powered innovation, SunPoynt TV, provides TV, lights and device charging for six hours or longer per night. The addition of a decoder makes it suitable for viewing TV in areas without electrical power. By adding a 3G modem and wireless keyboard, Internet access is possible.
Another significant technology is the VeriPoynt TV installation verification system. VeriPoynt devices communicating to a cloud computer can be used to verify successful installation of terrestrial or satellite based TVs by installers.