Wireless communications specialist Telit lost £7.6 million in 2006, but should break even this year, says chief executive Oozi Cats.

Losses at bombed-out Telit leapt nearly eightfold last year on turnover a mere one per cent ahead at £57.5 million and year-end cash fell from £8.8 million to £2.6 million. However, Cats, an Israeli entrepreneur who floated the company on AIM in 2005, exudes good cheer, attributing the loss increase to a decision not to capitalise research and development spending, investments in the USA and goodwill amortisation on a Korean acquisition.

He argues Telit achieved ‘proof of concept’ in 2006 for the Uxbridge-based company as an international leader in machine-to-machine (m2m) communication via cellular wireless networks and a distributor and supporter of cellular devices from manufacturers worldwide. He says there will be no need for any more write-offs in 2007 for the company, which is one of the largest CDMA (code division multiple access) mobile phone suppliers in Israel and a top mobile phone distributor in Italy.

‘We expect breakeven in 2007,’ said Cats, who commented that Telit’s US unit, installed last year in North Carolina, should start selling into the US market in the second quarter of this year. He pointed out that the company has strengthened its capital base with a £10.6 million investment into its m2m division by Bartolini After Market Electronics Services (BAMES), the former Italian subsidiary of Milan-based Celestica Inc., a leading global electronics service provider.

Investors who backed Telit’s 140p float and have seen the shares collapse to 27.5p today can only hope Cats’ optimism is borne out by events. They remain a speculation for the bold.