Sparks

Fonix’s H125 trading update confirmed that gross profit grew 6.5% to £9.8m and adjusted EBITDA grew 6.8% to £7.8m (53% of the consensus FY25 forecast). The company closed FY24 with underlying net cash of £11.3m, which supports its policy of paying out 75% of adjusted EPS. It expects to pay an increased interim dividend in March and also announced a special dividend of 3.0p payable on 12 February to shareholders as at 31 January. Fonix continues to expand its international reach, now having contracts in place with all major Portuguese mobile network operators (MNOs), and is in early discussions with MNOs and prospective broadcaster customers across several new European markets. The board anticipates a stronger H2 weighting than usual and is confident of meeting management expectations for FY25. We see the potential for upward pressure on forecasts based on H1 performance and expectations for a stronger H2 weighting.