Israel-based laboratory and telecom tech specialist BATM Advanced Communications Ltd (LON:BVC) is very confident about progress in the second half, when it expects growth to accelerate, after posting a solid first six months.
Chief executive Dr Zvi Marom recently told Proactive the new growth is coming mainly from promoting the group's new technologies and it has positive cash flow, which means it is funding investment from its own resources.
Moreover, the company revealed on September 5, it will be boosted by a profit of around US$2.9mln from the sale of its HQ, to help grow the business.
He said highlights in the next six months were likely to be sales of instruments from the bio-medical division and expects contracts worth millions of dollars to come through for the networking business from large government agencies and corporations at the end of this year and the beginning of next.
What does the company do?
The group operates two divisions - Bio-medical (which includes diagnostics and accounts for 57% of total revenues) and the networking and cyber division, which accounts for 43%.
The bio-medical division consists of a distribution arm, waste treatment and sterilisation and the dignostics business. The networking and cyber division is just that and does what it says on the tin.
Rapid growth in diagnostics
In the first half to end June, diagnostics revenues rose by 19.2% (23% of the biomedical division) and increased the number of customers, as 325 machines were sold, compared to 462 in the whole of 2015.
Significantly, the unit, which now has over 20 patents in the US, continued to achieve a high margin of 32.4% and contributed a higher adjusted operating profit compared with the first half of 2015.
Waste Management saw a reduction in revenue largely due to the delay in revenues from new equipment, which has been installed but not yet registering revenues, and the group expects to recoup losses in the second half.
For example, the period saw the first biological waste unit for the biopharma industry was completed for animal health group CEVA. This project is expected to grow to $1.2mln following further orders for the CEVA's European and US-based production sites in H2 2016 and 2017.
Meanwhile, in the networking and cyber business, there was a $1.8mln decrease in revenues to $19.1mln as the division continued to wind down the legacy products business whilst gaining traction with new products and solutions.
The gross profit margin for the division improved to 42%, compared with 40% in the first half of 2015.
What the chief executive said:
"Looking ahead, we are excited by the potential positive impact of the investment in our diagnostics business where we have positioned ourselves to capture a significant portion of the growing Chinese diagnostics market.
"This, together with the sustained growth in the rest of the Diagnostics business, is expected to result in further revenue growth in the second half of the year.
"In addition, we expect the Green Lab acquisition to provide access to a larger number of markets for our ecologic solutions in the Pathogenic Waste Treatment and Sterilisation business, which should see increased sales in the second half of the year, as well as continue to boost the Distribution unit.
"As a result of this, and further expected orders in the Cyber business sustaining the recovery in the Networking and Cyber division, the board looks to the future with confidence."