Wolfson’s revenues surge on sales of iPods and PSPs

Wolfson’s revenues surge on sales of iPods and PSPs

	Published : Tue, 25 Oct 2005 15:30 By : James Rowe Print this Story

The computer chip designer, Wolfson Microelectronics, has upgraded its profit forecast for the whole year of 2005. This impacted its shares, which swelled by 9 per cent by 19 pence to 235 pence, in the early morning trading on Monday. Wolfson is a provider of chips for electronic products which include mobile phones, games consoles, digital cameras and MP3 players.

The estimated increase in revenues of this Scottish company has been largely attributed to better sales of Apple’s iPod music player and Sony's PlayStation Portable (PSP). The revenues in the second half are projected to be more than £79 million compared to £45 million that was expected in July after its half yearly results were declared.

The company sources said it was having "better than expected demand for their flagship products". It also added: "Net cash generated from operations remains good and gross margins for 2005 continue to be in line with previous guidance of 49 per cent to 51 per cent".

Cazenove analysts also endorsed Wolfson’s statements when they said: "We believe that Wolfson continues to benefit from its leading positioning in low-power mixed-signal chips, which are used in the Apple iPods (Nano, Mini and Video), Playstation Portable, mobile phones and satellite navigation systems". Cazenove expects a profit growth of over 44 per cent for Wolfson in the second half of 2005 when compared to the same period during last year.

David Milne, chief executive officer of Wolfson, acceded that MP3 players were the current drivers of the business accounting for around 20 per cent of revenues. "We entered the second half of the year with a record order backlog which has translated into good revenue growth in the third quarter,” he added. 3G phones have reportedly for 10 per cent of total company turnover.

Wolfson has around 200 employees at its headquarters in Edinburgh. Its manufacturing plants are located in the Far East though. Plans are on the anvil to expand its test and assembly capacity. It has also opened a plant recently in China.