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Stock of the week: Manx Telecom

Written by:
Graham Spooner, investment research analyst at The Share Centre, picks communications provider Manx Telecom as stock of the week.

One of the most recent additions to The Share Centre’s recommended shares to ‘buy’ list is the Isle of Man communications company Manx Telecom, a small-cap stock on the AIM market. It is the leading communication provider on the Isle of Man and its core business provides fixed line, broadband and data services to around 4,000 businesses and 37,000 homes, accounting for 41% of group revenues. This steady core business allows the group to explore investing into other areas and expand from its island base.

It launched Vannin Ventures in 2016, a business to support the company’s long-term growth strategy, which bought a majority shareholding in Goshawk Communications to help underpin expansion. The cohort has a focus on innovative software solutions to improve speech clarity and intelligibility over modern telecoms networks, in particular for those with addressable hearing needs.

Interim results in September were accompanied with news of an agreement with BT to promote its mobile network for people with hearing loss in the UK in 2019. While revenue for the period was slightly lower at £38.1m, leading to a 1.4% fall in profit to £6.6m, the dividend was raised to 4.1 pence (3.9p). Expectations for the year remain unchanged.

The shares are for investors looking for income and prepared to invest in a company with a rather unusual niche. The current yield, as a result of a decline in the share price year to date is now in the region of 6.8%. We would class the shares as a medium to higher risk ‘buy.’

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