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Anite Profit Falls on Wireless Handset Testing Unit

Anite (AIE) Group Plc, the producer of license-plate recognition software for U.K. police, said first-half profit fell 42 percent on ``disappointing'' handset testing sales and costs to end development of its Nevis products.

Net income for the six months ended Oct. 31 dropped to 4.85 million pounds ($9.8 million), or 1.4 pence a share, from 8.33 million pounds, or 2.4 pence, a year earlier, the Slough, England-based company said today in a statement. Revenue rose 9.8 percent to 79.1 million pounds.

``In the next six months on the mobile-phone testing side we expect it to be similarly weak compared to the first half, but we expect network testing to continue to grow,'' Chief Executive Officer Steve Rowley said in an interview today. ``We believe we are going to be back to growth next year in wireless.''

Orders at the wireless handset testing division fell on lower spending by customers in the U.S. and ``weakness'' in Japan and Korea, according to the statement. Anite, which also supplies design services to handset manufacturers such as Nokia Oyj, spent 3.2 million pounds on development costs at the unit. The company had a positive first time contribution from its wireless network testing unit Nemo, which it acquired in 2006.

While both the Travel and Public divisions ``increased operating margins and profit contribution, it was not enough to offset the weakness in Wireless,'' Jonathan Imlah, an analyst at Altium Securities, wrote in an e-mailed note today. ``Moreover, management is guiding that full-year 2008 estimates for profit before tax is likely to be around the same level as last year, suggesting further downgrades to estimates.'' He has a ``buy'' rating on the stock.

In November, Anite signed a deal with Anite Technologies Inc. to develop testing technology for products that meet new LTE, or 4G standards. The costs linked to the exit of Anite's own development program Nevis were 2.5 million pounds, the statement said.

Anite fell 4.5 pence, or 9.8 percent, to 41.5 pence in London, giving the software company a market value of 145.8 million pounds. The shares have fallen 49 percent this year.

To contact the reporter on this story: Sabine Pirone in London at spirone@bloomberg.net.

To contact the editor responsible for this story: Victoria Richards in London at vrichards@bloomberg.net

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