(MENAFN- ProactiveInvestors - UK) Miniature antennas maker Sarantel (LON:SLG) expects second half revenues to get a "material boost" from the large military order it received in February.
Sales in the half year to March dipped slightly to £900,000 from £1 million as development revenues from several military contracts declined ahead of production starting in the second half. Production revenues rose by nine per cent, driven by the military market.
Losses for the period were £1.74 mln against £1.69 mln with the group's cash balance of £0.3 mln.
The firm also has a £2.0mln HSBC Loan Facility, of which £0.7 mln has been utilised to date.
Sarantel added it is still in talks with a number of consumer electronics companies over the use of its antennas in the mass market, though it says progress have been slower than it hoped.
The group said it is also developing a number of products aimed at major camera OEMs, adding it can see an enormous opportunity for its technology in a number of high volume consumer markets and "will continue to apply the resources available to gain traction in these very high growth markets."
Geoff Shingles, chairman, added: "We are beginning to see the fruits of our labour as orders from the large military contracts we announced last year are starting to flow. The largest order in Sarantel's history was announced in February and this will have a material impact on the group's second half revenues.
The importance of Sarantel's antenna technology to a number of major US defence contractors validates our technological approach and provides a strong endorsement, helping the Group to build momentum in this very important market".
House broker XCAP said that while interim sales were a bit light of its forecasts, the company was adamant this was due to timing issues and nothing else.
"Assuming a gross margin of around 50%, it can cover a £1m sales slippage from our original forecasts for 2012 and 2013."
Net debt is currently £548,000 and XCAP expects it will peak at around £1.6m in March 2013.
"This market is taking no hostages," the broker added , but it expects Sarantel to become healthily cash positive from the second half of 2013 onwards.
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