Mobile satellite service provider
With more mariners using cheaper data services, rather than expensive voice calls, maritime voice sales fell 8.1 per cent in 2011 to $90.2m (£57.3m). Growing data usage, largely from the new Fleetbroadband terminal, helped offset this, though. Indeed, Inmarsat added 9,818 new terminals in the year, and total maritime revenues slipped just 0.5 per cent to $358.9m. However, although reduced military usage in Afghanistan was partly offset by increased satellite phone usage in Japan following the earthquake there, and in North Africa, overall land mobile services sales still fell 1.3 per cent to $151.7m.
Meanwhile, the collaboration with US 4G operator LightSquared has turned sour after it failed to gain US regulatory approval. In fact, LightSquared owes Inmarsat $56.3m, reflecting contractual milestones.
|ORD PRICE:||461p||MARKET VALUE:||£2.07bn|
|TOUCH:||460-461p||12-MONTH HIGH:||636p||LOW: 364.9p|
|DIVIDEND YIELD:||5.5%||PE RATIO:||13|
|NET ASSET VALUE:||241¢*||NET DEBT:||129%|
The migration to the cheaper terminal will dampen sales growth – but only in the short-term, with growth due to take off from 2014 onwards. However, until that growth starts to materialise, a PE ratio of 13 looks about right. Hold.
Last IC view: Good value, 396p, 4 Aug 2011