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BATM’s earnings beat prompts bumper upgrades

The provider of medical laboratory systems and cybersecurity and network solutions has beaten analysts' profit forecasts and building contract momentum has underpinned significant earnings upgrades
March 6, 2019

BATM Advanced Communications (BVC:48p), a provider of medical laboratory systems and cybersecurity and network solutions, has issued an earnings beat and reported a robust order book, which has prompted some hefty earnings upgrades.

Strip out one-off gains from property disposals, and the company moved from break-even on revenue of $107m (£81.4m) in 2017 to an operating profit of $2.6m that was 30 per cent higher than analysts had predicted. Last year’s annual revenues of $119.6m beat market estimates by 5 per cent. A key driver has been BATM’s cybersecurity and networking division, which continues to win new government contracts, so much so that the unit quadrupled its operating profit to $3.6m on 16 per cent higher revenues of $57.5m.

Moreover, since the year-end, BATM has announced a further $6.5m of follow-on contracts with one client for delivery in 2019 and chief executive Dr Zvi Marom told me during our results call that he expects several proof of concept (POC) trials with potential customers to be converted into sales this year as government defence agencies seek to secure their communications and prevent cyber attacks on their infrastructure. These contracts could be “worth tens of millions of dollars in revenue”. BATM is also delivering on a five-year contract (orders of $30.7m received to date) to provide information communication technology (ICT) services to an agency of a government defence department.

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