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BATM Advanced Communications Ltd: THE INVESTMENT CASE

BATM Advanced Communications set for a return to growth, broker says

BATM, which operates in the telecoms and biomedical sectors, is predicted to post revenues of US$100mln, up from US$90.4mln in 2016, with EBITDA rising to US$4.1mln from US$100,000.
BATM Advanced Communications set for a return to growth, broker says
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finnCap has updated its forecasts

City broker finnCap is forecasting BATM Advanced Communications (LON:BVC) will return to growth in 2017 after what it described as a “difficult” year.

BATM, which operates in the telecoms and biomedical sectors, is predicted to post revenues of US$100mln, up from US$90.4mln in 2016, with EBITDA rising to US$4.1mln from US$100,000.

“We expect a recovery in both divisions to generate [those sales],” said analyst Rhys Williams. “Both are expected to return to profit.”

finnCap provided its appraisal following the release of full-year results.

The numbers had been heavily trailed in trading update last week that revealed BATM had been affected by contract delays.

Below the headline figures there were encouraging signs of progress. The networking unit gained 58 new customers in 2016, compared with 22 the year before.

Meanwhile the cyber operation has landed a US$5.2mln contract and is engaged in ‘multiple trials’ of its technology.

Underlying progress

The bio-medical division’s underlying progress has been solid with revenues from the diagnostics business up 15.5%.

"We are introducing within months some very unique devices, which are catching a lot of attention  from the big boys," chief executive Zvi Marom, said in an interview with Proactive Investors.

Waste treatment and sterilisation has also done well and the operation announced earlier this week it has been awarded its first agri-waste contract – a deal worth US$2.5mln.

"We are pleased with the commercial advancements made by most of our businesses in winning new customers, laying foundations for a sustainable recovery and growth,” said CEO Marom.

“In particular, the diagnostics unit saw a solid year-on-year increase in revenues as the unit increased the number of machines sold to over 500.”

Hidden value 

Marom pointed to the “significant inherent value” BATM’s assets overlooked by the market.

A case in point is the firm’s Adaltis medical diagnostics equipment unit, where investment into the business valued it at US$58mln.

At 1pm, BATM shares were changing hands for 19p each. finnCap reckons they are worth 22p.

 

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March 01 2017

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