Cambridge-based Amino Technologies (AMO:AIM) has long held the reputation as a cash king, and nothing's changed there. Cash generated from operating activities in the year to November 2015 adds up to £6.5 million, or 96% of earnings before interest, tax, depreciation and amortisation (EBITDA), and that's after £2.5 million of capex, £1.4 million spent buying back shares and £1.9 million on dividends.
Do the sums and that leaves net cash £800,000 up at £20.6 million, or a staggering 40p per share. Shares has previously flagged the opportunity for the company to return some of those readies to shareholders, and today it did, although perhaps not in the way some expected. There's no one-off value return and maybe that's why the stock has stayed roughly flat today, off 1p to 126p.
Instead there's a whopping 45% hike to the normal payout, meaning 5p for the full year, 25% higher than expected by analysts at FinnCap. Strip that cash out, the shares are trading on price to earnings (PE) multiple of 10.6 this year, and offer a 4.4% yield, even after rallying 46% since October.
Some investors might still grumble but in many ways, this is better since it shows a long-term commitment to creating value for shareholders and returning surplus to them. That's the picture CEO Don McGarva prefers to paint, his confidence in the core strength of the business undiminished despite coming through a spell of limited growth.
Wise investment in R&D (£7 million worth last year) is paying-off with best in class set-top box kit with flexible functionality that can meet the needs of more simple offerings in emerging markets, and the feature-rich requirements of more mature markets, such as in the US. Expansion into home hubs, or 'Home Reach' as Amino calls its own product, which connects things like thermostats, doors sensors etc, is also making progress. This is an exciting opportunity of which we expect to hear more as time goes by. In the meantime, Amino is quite happy to continue building on its internet protocol (IP) broadcasting basics, and as growth turns higher, it has plenty of cash to invest in the business while keeping shareholders happy.