28 February 2016 – interim results
Results for the six months ended 31 December 2016 cover an unusual period. A Strategic Review commenced in July 2016 then negotiations took place which resulted in additional liquidity of up to $242m from bondholders. This consent was concluded in January 2017 and although this is after the latest balance sheet date it will be reflected at the year end. Revenue increased by 4.2% to $32.3m from $31.0m for the comparative period. On a constant currency basis revenue increased by 11.9 %. The EBITDA loss was $6.3m, which widened from an EBITDA loss of $3.8m, primarily driven by the increased costs of sale reflecting higher kit costs and third party sub contract costs on government contracts. There was a significant increase in the finance expense during the period as the initial costs of the strategic review were expensed prior to the conclusion of new financing. Cash absorbed from operations was $20.4m (2015: $18.9m). Cash interest paid was $3.5m (2015: $27.0m) so the level of cash absorbed from operating activities was reduced to $23.9m (2015: $45.9m). Period end cash of $14.4m increased to $62m as of 17 February following the receipt of the first tranche of new money offset by certain HYLAS 4 capex payments. There have been some setbacks along the way but we feel that the story is worth sticking with for now and rate the shares as a SPECULATIVE BUY.