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CSR's 'modest' growth forecast sends shares to three year low

Written by Sam Fountain

Thursday, 28 February 2008

GPS capabilities could be where CSR is going A flat forecast for the coming year has driven the shares of Bluetooth pioneer, CSR to their lowest point in almost three years, despite posting a 20 per cent rise in dollar profits for last year. The Cambridge-based silicon designer, which supplies half of the world's Bluetooth chips, has released its figures for the year to December, boasting $150m (£75.6m) operating profits from revenues of $848.6m (£428m), up from $704m last year. The market failed to appreciate the company's successful results, which included fourth quarter profits up almost a half on the same period last year, instead focussing on its forecast for 2008, which outlined first half revenues anticipated to be broadly flat compared with last year's numbers, building to modest growth overall. Shares in CSR have taken a 22 per cent dive on the announcement, falling 93p to 332.5p, their lowest point since April 2005. This record drop in value could be attributed to the company's acknowledgment of the current, shaky economic climate, to which it attributed the slowdown in Chinese orders it has experienced, denying any competition issues. "For the short-term, we are fully aware of the current economic climate and consumer sentiment," said CEO, Joep van Beurden. "We are seeing a run-down in customer inventory levels, particularly in China, and customer caution on their own sales outlook. "For these reasons, we believe the first half revenues for 2008 will be broadly flat against last year; but the visible pipeline of new product introductions leads us to expect modest year-on-year revenue growth in the second half of this year." The company been diversifying its product range over the last couple of years, recently releasing its MusiCore chip, which will allow customers to create the 'worlds best music phone,' enabling 100 hours of music playback with audio quality comparable to leading edge MP3 players. As recently reported in Business Weekly, it has also moved into the GPS market with its purchase of Cambridge Positioning Systems and NordNav last year, a step which could see the Cambridge wireless wizards dominating another huge trend in mobile handset technology. "We enter 2008 with strong market share, a leading position in all segments and a pipeline of innovative new products such as MusiCore that are on-track and exciting in their potential," van Beurden said. The company, which contributes technology to the biggest noise in mobile handsets in recent times, the Apple iPhone, said that it expects recover its marginal loss of market share at a top tier phone OEM during 2009, adding that it had made good progress at another top tier OEM to whom it had not previously supplied. "We have previously acknowledged that there would be a loss of market share in one top tier phone OEM which would affect 2008. We have already taken steps to address this and expect to recover this share in 2009," said van Beurden. Despite the market's dubious response to the company's results, van Beurden sees CSR's future striding above the economic turndown, bounding towards $2bn revenues within the next four years. "Our plans for the longer term, specifically our ambition to grow our revenue to $2 billion by 2012, will be the product of an operational assessment that I am conducting at this moment. I will be sharing the results with the market in the spring," he said. In other news, CSR also announced the appointment of Will Gardiner to the position of FD at the company, replacing Paul Goodridge, who has stepped down from his post for personal reasons. Gardiner, a Harvard graduate, comes to the Cambridge firm from BSkyB, where he served as director of finance and technology. Set as favorite Bookmark Email This Hits: 545 Trackback(0) TrackBack URI for this entry Comments (0) Subscribe to this comment's feed Write comment This content has been locked. You can no longer post any comment.

 

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