A failed Proton rocket launch in May forced Inmarsat (ISAT) to delay the launch of its third Global Xpress satellite until late August, and the debut of its high-speed, worldwide broadband network to the end of 2015. Simply pencilling in those launch dates sent the satellite specialist's shares up 7 per cent on results day, even as operating profit slid 14 per cent to $202m (£130m).
Inmarsat continued to cash in on soaring demand for fast, reliable wireless connectivity at sea, in the air and across remote regions. Brisk trading drove aviation sales up 26 per cent and the division is close to finalising contracts for in-flight broadband services with several major airlines. But slumping sales of legacy products in the maritime segment offset strong gains from FleetBroadband, VSAT and other newer offerings. And fewer conflicts, together with tighter defence budgets, account for double-digit declines in revenue and operating profit in the government division.
Management expects Global Xpress to contribute at least $500m to annual turnover within five years of going live. Moreover, broker Jefferies thinks the planned addition of a fourth satellite could add another $50m to $100m to that forecast. And finishing the flagship programme should mean capital expenses fall by more than a fifth to below $400m in 2016.
Consensus forecasts are for adjusted EPS of 45¢ this year, rising to 54¢ in 2016.
| INMARSAT (ISAT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 953p | MARKET VALUE: | £4.3bn | |
| TOUCH: | 952.5-953.5p | 12-MONTH HIGH: | 1,040p | LOW: 653p |
| DIVIDEND YIELD: | 3.4% | PE RATIO: | 20 | |
| NET ASSET VALUE: | 262¢* | NET DEBT: | 163% | |
| Half-year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2014 | 652 | 168 | 30 | 18.68 |
| 2015 | 616 | 166 | 29 | 19.61 |
| % change | -6 | -1 | -3 | +5 |
Ex-div: 1 Oct Payment: 23 Oct *Includes intangible assets of $794m, or 177¢ a share £1=$1.56 | ||||
