20 December 2016 – final results/strategic review
The company has revealed its final results for the year to 30 June, the outcome of its strategic review and a first quarter trading update all at once! In a nutshell, the final results for the year showed a modest decline in revenue to $82.8m (2015: $85.2m), whilst the loss for the year fell slightly to $69.2m (2015: $73.3m). Net debt at the year end increased to $589m (2015: $406m) as the group continues to invest in the business. The increasing levels of competition in the sector which have led to fears of overcapacity and concerns over the level of debt have led to the strategic review. The group is still investing in its satellites and additional funds are required to bring this development programme to a conclusion. However, once the satellites are all operational there is clearly scope for significant strong cashflow given the fact that the group’s costs are largely fixed provided that it can sell all enough capacity. The group’s bondholders have now agreed to support a number of refinancing initiatives which will allow the group to proceed towards this goal. The group has also announced that revenues in the three months to 30 September rose to $18.0m (2015: $13.7m) which is clearly also encouraging. The group is not out of the woods yet by any means but prospects look a lot better than for some time and we believe the shares deserve a recommendation of SPECULATIVE BUY.