Inmarsat's shares rose 9 per cent after the mobile satellite service provider delivered a 12.7 per cent increase in maritime revenue, boosted by a strong take-up of its FleetBroadband service. In the six month period, over 4,300 terminals were added, taking the total to over 30,000, although this failed to translate into higher profits because customers were switching from older higher-margin maritime services. Still, investors taking the long-term view should be rewarded especially as the group's super-fast broadband Global Xpress offering comes on stream in 2014.
The rise in maritime revenue also reflected an ongoing migration of end users from usage-based pricing plans to a subscription-based service which includes usage but has higher monthly fees. There was also a steady increase in average revenue per user. Admittedly, the switch to FleetBroadband – a service that includes email and voice-over IP which is recorded as data revenue – reduced voice services income by 11.7 per cent to $41.4m (£26.6m). It's also worth noting that maritime turnover was impacted by lower pricing for FleetBroadband from 1 April in reaction to increased competition and the depressed nature of the shipping industry.
On the distribution side, Inmarsat Solutions saw broadband turnover up by 32 per cent, but this came largely through the acquisitions. Broker forecasts are under review post results.
| INMARSAT (ISAT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 528p | MARKET VALUE: | £2.37bn | |
| TOUCH: | 526-529p | 12-MONTH HIGH: | 540p | LOW: 364p |
| DIVIDEND YIELD: | 5.1% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 256¢* | NET DEBT: | 128% | |
| Half-year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2011 | 683 | 255 | 42.0 | 15.4 |
| 2012 | 684 | 223 | 38.0 | 16.9 |
| % change | +0 | -13 | -10 | +10 |
Ex-div: 3 Oct Payment: 25 Oct *Includes intangible assets of $1.07bn, or 239¢ a share £1 = $1.559 | ||||
