Scottish microelectronics firm Wolfson is targeting a 60% increase in revenues in the early part of 2013 as it continues to capitalise on its expertise in mobile audio.
The Edinburgh company, which makes speaker and microphone equipment used by smartphone and tablet computer brands, announced sales to the industry had leapt during the quarter to the end of December.
But the improvement in fortunes which precipitated a full-year revenue hike of 15%, to $179.7 million was not enough to counteract increased costs, as the firm recorded pre-tax losses of $9.4m over the 12 months.
Shares closed the day down 6.44% at 185p, despite improvement from the $24.1m total loss booked at the end of 2011.
Chief executive Mike Hickey said his firm had established “strong revenue momentum” during a year in which its audio equipment grew revenue share to account for 75% of the company’s income.
“By penetrating the most dynamic and fast-growing segments of the consumer electronics market, we have established strong revenue momentum, growing more than 50% year-on-year in the fourth quarter and, as anticipated, returned to profit in the second half of the year,” Mr Hickey said.
“We are increasing our market presence in smartphones and tablet computers, and are now shipping to most of the world’s brand-leading mobile phone and tablet computer manufacturers.
“This, combined with our class-leading portfolio of audio products delivering another record year for new design-ins, positions the company well for further strong growth in 2013.”
Wolfson struggled during the early part of last year, but returned to profitability in the second half thanks to take-up of its devices in the latest generation of handsets and tablet computers.
The full extent of the firm’s deals are not disclosed because of confidentiality clauses, but it is known that Samsung, LG, Microsoft, BlackBerry, Motorola, Fujitsu and Sony are among its customers.
Reports have also suggested that Wolfson’s oblique claims about working for a “brand-leading consumer electronics company” refer to a tie-up with Apple.
It expects revenues from its micro-electro-mechanical microphone systems to increase as it upscales production in the year ahead, and also hopes to pick up an increasingly large slice of the audio hub sector.
Combined, the two markets are reckoned to be worth a total of around £3.5bn.
The company said continuous investment in research and development and engineering tools was “imperative” to its growth strategy and longer-term competitiveness, with design-in products proving particularly popular with manufacturers.
Analysts said the results were “largely as expected” but represented a “mixed bag”.
“For several years, Wolfson has promised substantial revenue improvement from the increased number of design-in wins in the mobile industry, yet failed to deliver it,” said finnCap’s Lorne Daniel.
He warned of lower-than-anticipated gross margins during 2013, but said this was expected to improve throughout the year.
business@thecourier.co.uk