Proactiveinvestors United Kingdom Inmarsat Plc https://www.proactiveinvestors.co.uk Proactiveinvestors United Kingdom Inmarsat Plc RSS feed en Sat, 20 Jul 2019 16:43:48 +0100 http://blogs.law.harvard.edu/tech/rss Genera CMS action@proactiveinvestors.com (Proactiveinvestors) action@proactiveinvestors.com (Proactiveinvestors) <![CDATA[News - CMA to probe Inmarsat takeover for potential competition issues ]]> https://www.proactiveinvestors.co.uk/companies/news/223978/cma-to-probe-inmarsat-takeover-for-potential-competition-issues-223978.html Inmarsat Plc’s (LON:ISAT) US$3.4bn takeover by a private equity-led consortium is being investigated by UK antitrust authorities. 

The Competition & Markets Authority has brought the deal to the attention of the Secretary of State for Digital, Culture, Media & Sport as it may reduce competition in the market.

READ: Inmarsat shares rocket higher after agreeing US$3.4bn takeover by private equity-led consortium

Inmarsat agreed in March to be taken private by a consortium consisting of private equity firms Apax Partners of the UK and US-based Warburg Pincus, together with two Canadian pension schemes.

Completion of the deal had been pencilled in for around the end of the year, pending on regulatory approvals.

The CMA said on Tuesday that it was considering whether the transaction “will result in the creation of a relevant merger situation …[that] may be expected to result in a substantial lessening of competition” in the UK.

Comments on the transaction from any interested party have been invited, with a deadline for submission of July 29.

A deadline of September 10 has been set for an initial decision from the CMA.

 

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Tue, 16 Jul 2019 08:46:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/223978/cma-to-probe-inmarsat-takeover-for-potential-competition-issues-223978.html
<![CDATA[News - Inmarsat goes with Airbus to build next generation of mobile broadband satellites ]]> https://www.proactiveinvestors.co.uk/companies/news/221212/inmarsat-goes-with-airbus-to-build-next-generation-of-mobile-broadband-satellites-221212.html Inmarsat Plc (LON:ISAT) has chosen Airbus as the manufacturer of a trio of new satellites for its Global Xpress (GX) network with the partnership to provide a step-change in GX's capabilities, according to the satellites operator.

Inmarsat launched GX in 2010 and Rupert Pearce, its chief executive said it remains the world's only truly seamless global mobile broadband network.

This upgrade will be compatible with existing GX terminals, be future proof and cut the lead time from orders to orbit, he said.

Airbus will build three next-generation GX satellites, with the first scheduled to launch in the first half of 2023. The European group built the Inmarsat-4 spacecraft, Alphasat and is currently working on the Inmarsat-6 satellites.

Inmarsat CEO Pearce pointed out that the new contract marks the start of a new long-term strategic partnership between the companies, noting: "GX has rapidly become a very significant and sustained revenue growth contributor for Inmarsat.”

Once the three new satellites are in orbit, the GX network will comprise ten satellites.

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Thu, 30 May 2019 09:21:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/221212/inmarsat-goes-with-airbus-to-build-next-generation-of-mobile-broadband-satellites-221212.html
<![CDATA[News - Inmarsat profits fall in first quarter ]]> https://www.proactiveinvestors.co.uk/companies/news/219469/inmarsat-profits-fall-in-first-quarter-219469.html Inmarsat Plc (LON:ISAT) reported soft sales and profits at the start to the year but said it remained confident about hitting full-year targets as it awaits being taken private.

The satellite operator, which is being taken private in a US$3.4bn deal by a private equity-led consortium, generated revenue of US$346.9mln in the first quarter, up 0.4% on the same period a year ago. For the full year it maintained guidance of $1,300mln-$1,400mln.

READ: Inmarsat shares rocket higher after agreeing US$3.4bn takeover by private equity-led consortium

Underlying earnings (EBITDA) fell 12.9% to US$152.4mln. Excluding Ligado and costs relating to the takeover offer, EBITDA increased 18.7% to $169.4m.

Post-tax profit crashed $326m lower, which Inmarsat said mainly reflecting a change in the unrealised conversion liability on its 2023 convertible bond of $297.9m, as well as US$17mln costs relating to the offer.

If shareholders vote on 10 May to approve the offer and there are regulatory hiccups, the board expect the deal to be completed by the end of the year.

The trading update came ahead of the group’s annual shareholder meeting on Wednesday, an event that last year saw investors vote down the executive pay policy, following rebellions against pay at AGMs in 2012, 2013 and 2015.

Chief executive Rupert Pearce said the first quarter was “a strong underlying performance... building on the positive momentum achieved during 2018", saying the group continued to “build and aggressively defend market share in our target markets”.

Revenue from the Maritime arm, the group’s largest division, was down 9.5%, while the Government and Aviation segments saw sales up 28.6% and 53.4%.  The Enterprise arm was down 13.8% and cash from the deal with US network Ligado was down 90.1%.

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Wed, 01 May 2019 11:28:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/219469/inmarsat-profits-fall-in-first-quarter-219469.html
<![CDATA[News - Private equity bids surge as buyout firms exploit weaker valuations amid tough UK market ]]> https://www.proactiveinvestors.co.uk/companies/news/217145/private-equity-bids-surge-as-buyout-firms-exploit-weaker-valuations-amid-tough-uk-market-217145.html Private equity firms have been swooping in with offers to buy struggling UK companies over the past two years as they take advantage of weaker valuations.

A challenging UK market and an uncertain economic outlook, driven by Brexit fears, have dragged on the share prices of many London-listed businesses, making them attractive takeover targets. 

The availability of cheap debt to finance deals has also contributed to a surge of private equity bids.

Last year, private equity firms invested £28.6bn in UK acquisitions, according to data analysis business Unquote, and just three months into 2019 the market has already seen a slew of deals.

Private equity bids in 2019

The latest deal announcements came on Monday from British satellite operator Inmarsat PLC (LON:ISAT) and financial services firm IFG Group PLC (LON:IFG).

Inmarsat has agreed to be taken over by a consortium led by private equity firms Apax Partners and Warburg Pincus for US$3.4bn, nine months after rejecting an offer from US rival EchoStar.

READ: Inmarsat shares rocket higher after agreeing US$3.4bn takeover by private equity-led consortium

The consortium has exploited the fact that Inmarsat shares had deteriorated over the past five years following a period of poor performance and amid concerns that it faces increasing competition from rivals like Elon Musk’s SpaceX and the Richard Branson-backed OneWeb.

Similarly, IFG shares had lost value over the past year before the company announced it would be bought by UK private equity firm Epiris for £206mln.

Another private equity bid this year came in the form of a rescue deal for café chain Patisserie Holdings, the parent company of café chain Patisserie Valerie.

READ: IFG agrees to be taken out by UK private equity firm Epiris in £206mln deal

Last month, Patisserie Holdings was saved from closure by a management buyout backed by Irish-based private equity firm Causeway Capital Partners. The company, which collapsed into administration in January, was sold for £13mln, a fraction of the £450mln the group was once worth.

Other private equity bids this year have included Apollo Global Management’s collapsed deal to buy plastic packaging firm RPC Group PLC (LON:RPC) and the cut-price takeover of airline Flybe by Connect Airways, a consortium made up of US private equity firm Cyrus Capital Partners, Virgin Atlantic and Stobart Group.

Takeover approaches in 2018

Last year was also a busy year for the industry, with some of the takeover deals including: the acquisition of biopharmaceutical technology group Abzena by Astro Bidco Ltd, a fund set up by a US private equity house Welsh, Carson, Anderson & Stowe; the takeover of electronic components maker Laird by US buyout group Advent International; and Bain Capital’s purchase of insurer eSure.

Unsuccessful bids included: Apollo’s attempt to buy British train and bus operator FirstGroup PLC (LON:FGP); offers by private equity firms KKR and L Catterton to take over Asian restaurant chain Wagamama; and CVC’s approach to acquire Kantar, the market research arm of WPP PLC (LON:WPP).

KKR said to be circling Asda 

More recently, there has been speculation that private equity firms could soon start circling Walmart Inc’s (NYSE:WMT) Asda after the UK Competition and Markets Authority raised “extensive competition concerns” with the supermarket chain’s proposed £7.3bn merger with rival J Sainsbury PLC (LON:SBRY).

READ: Sainsbury's and Asda suggest selling up to 150 supermarkets to get CMA approval

According to media reports, KKR is understood to be among the private equity firms said to be exploring a bid for Asda.

Sainsbury’s and Asda have agreed to sell up to 150 supermarkets and several convenience stores while promising to cut prices to convince the CMA to approve the deal.

The CMA has until April 30 to publish its final report on the deal.

Further offers on the horizon?

With some struggling sectors presenting opportunities for private equity firms, there could be more bids on the horizon. Retail, restaurant, construction and outsourcing are among some of the sectors that have suffered recently. 

However, investing in UK stocks is risky given that the government is no closer to agreeing a deal for Britain’s departure from the European Union, increasing the likelihood of a disorderly Brexit.

The Bank of England has warned that a no-deal Brexit could cause more damage to the UK economy than the 2008 global financial crisis while a government report has said this scenario could spell big trouble for companies with EU ties.

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Mon, 25 Mar 2019 14:21:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/217145/private-equity-bids-surge-as-buyout-firms-exploit-weaker-valuations-amid-tough-uk-market-217145.html
<![CDATA[News - Inmarsat shares rocket higher after agreeing US$3.4bn takeover by private equity-led consortium ]]> https://www.proactiveinvestors.co.uk/companies/news/217094/inmarsat-shares-rocket-higher-after-agreeing-us34bn-takeover-by-private-equity-led-consortium-217094.html Inmarsat Plc (LON:ISAT) has agreed to be taken over by a private equity-led consortium in a deal that values the British satellite operator at US$3.4bn.

The consortium, which includes private equity firms Apax Partners and Warburg Pincus as well as pension funds Canada Pension Plan Investment Board and Ontario Teachers’ Pension Plan, will pay US$7.21 a share in cash.

The offer was made on January 31 but Inmarsat only revealed that it was considering the approach last Tuesday after a leak.

READ: Inmarsat considers US$3.3bn takeover bid from private equity-led consortium

In sterling terms, Inmarsat said the 546p per share bid represents a 45% premium to its 377p closing price the day before press speculation on February 28 of a possible deal.

Consortium recognises need for continued investment, says Inmarsat 

Inmarsat said it considers the terms of the acquisition to be “fair and reasonable” and recommended shareholders approve the offer.

“The expertise and skills of our employees, together with continued investment in our technology and infrastructure, are integral to delivering on our growth potential,” Inmarsat non-executive chairman Andrew Sukawaty said.

“We are pleased that the consortium recognises this and that we are able to present this offer to shareholders.”

The consortium said it believes Inmarsat is “well positioned for growth based on its unique global infrastructure, leading technological and capacity roadmap and strong spectrum holdings”.

Inmarsat has “predictable revenues” from a range of long-term contracts with governments and other financially secure customers, it added.  

 “As experienced and long-term investors in telecommunications, the consortium values and admires Inmarsat for its proven expertise in maritime, aviation, defence and broadband satellite communications, alongside its strong market positions and potential for growth,” it said.

“Our planned ownership will enable this innovative British company to fulfil its ambitions to become a global leader in next-generation satellite communications, including the fast-growing market for commercial aviation in-flight connectivity.”

The consortium plans to maintain Inmarsat's UK headquarters and the company will continue to operate as a standalone business.

Counterbid speculation cools

The deal comes after EchoStar ditched a takeover of its British rival last year.

In recent weeks, there has been market speculation EchoStar would return with a counter bid for Inmarsat but those expectations have cooled following Monday's announcement. 

"The acceptance for an all cash offer of $7.21 (roughly equivalent £5.45) comes as a surprise to me as I suggested last week that Inmarsat would hold off given that this offer is only marginally higher than the previous one which at the time management felt undervalued the business," said Helal Miah, investment research analyst at The Share Centre.

"This becomes increasingly surprising now we have some of the key factors which held the business back, such as the Maritime division, showing signs of abating, and very good prospects for its In-Flight broadband service.

"However, some investors will welcome this news since the shares have been languishing until recent takeover speculation."

Inmarsat’s shares have suffered in recent years following a period of poor performance and an uncertain outlook, making it an attractive takeover target.

The company has been owned by private equity firms previously. Apax and Permira purchased a majority stake in the firm in 2003 before floating it in 2005.

In morning trading, shares in Inmarsat jumped 8.6% 550.20p. 

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Mon, 25 Mar 2019 08:15:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/217094/inmarsat-shares-rocket-higher-after-agreeing-us34bn-takeover-by-private-equity-led-consortium-217094.html
<![CDATA[News - Inmarsat considers US$3.3bn takeover bid from private equity-led consortium ]]> https://www.proactiveinvestors.co.uk/companies/news/216823/inmarsat-considers-us33bn-takeover-bid-from-private-equity-led-consortium-216823.html British satellite operator Inmarsat Plc (LON:ISAT) is considering a US$3.3bn takeover approach from a consortium led by private equity firms Apax Partners and Pincus.

The company said it had received a non-binding offer from the consortium, which also includes pension funds Canada Pension Plan Investment Board and Ontario Teachers’ Pension Plan, on January 31 for US$7.21 a share in cash.

READ: Inmarsat earnings led higher by demand for aviation broadband in fourth quarter

However, the group only revealed the offer on late Tuesday after news of the approach was leaked.

In Wednesday morning trading, shares jumped 16.3% to 509.4p in reaction to the announcement. 

Inmarsat said the proposal remains under discussion and there can be “no certainty to the terms on which any offer would be made” or that the talks would lead to a firm offer.

Under UK Takeover Panel rules, the consortium has until April 16 to make a formal offer

The proposed offer represents a 24% premium to Inmarsat’s closing share price on Tuesday. 

Share price underperformance makes Inmarsat attractive takeover target 

The approach from the consortium comes after US satellite company EchoStar pulled out of a takeover of Inmarsat last year.

In recent weeks, there has been market speculation that EchoStar was considering another approach.

A period of poor performance and an uncertain outlook has weighed on Inmarsat’s shares in recent years, making it attractive to buyout groups.

Inmarsat has been owned by private equity firms previously. Apax and Permira purchased a majority stake in the firm in 2003 before floating it in 2005.

Takeover approach hardly surprising, says analyst

Helal Miah, investment research analyst at The Share Centre, said it has long believed Inmarsat remained a takeover target following the failed bids by Echostar and Eutelsat last year. s

Miah said shares have gained on the news but are still some way short of the sterling equivalent takeover price of £5.45. 

The reason for this, he said was:  “Firstly it is a non-binding offer, nothing definite. Secondly, Inmarsat was adamant in remaining independent when Echostar made their approach at a much higher price, as Inmarsat’s management believed by remaining independent they could deliver more shareholder value over the long term.

He added: "However, since Echostar and Eutelsat dropped their bids, the shares on Inmarsat drifted lower, breaching below £4. A profit warning mostly relating to its struggling and largest division Maritime did not help."

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Wed, 20 Mar 2019 09:01:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/216823/inmarsat-considers-us33bn-takeover-bid-from-private-equity-led-consortium-216823.html
<![CDATA[News - Inmarsat earnings led higher by demand for aviation broadband in fourth quarter ]]> https://www.proactiveinvestors.co.uk/companies/news/215986/inmarsat-earnings-led-higher-by-demand-for-aviation-broadband-in-fourth-quarter-215986.html Satellite operator Inmarsat posted a 14.6% rise in earnings in the fourth quarter, driven by demand for aviation broadband.

The British group, which provides communications to ships, aircraft, companies and governments, said earnings (EBITDA) increased to US$190.6mln in the final three months of 2018 as revenue gained 7.6% to US$378.7mln.from

READ: Inmarsat wins contract to provide GX Aviation inflight broadband solution to Indonesian national airline Garuda

The aviation business saw revenues jump 51.8% to US$72.4mln in the quarter and the government division grew by 13.1% to US$102.7mln.  That offset declines in the enterprise and maritime units of 2.2% to US$31.4mln and 6% to US$135.7mln, respectively.

Total EBITDA for the year was US$7701.mln, up 4.2% from 2017, and revenue edged up 5.3% to US$1.47bn.

In 2019, revenue is expected to be US$1.3-1.4bn excluding a contribution from US partner Ligardo.

The group is targeting “mid-single digit percentage” revenue growth on average per year from 2018 to 2022 with EBITDA and free cash flow generation “improving steadily". 

"We remain focused on building and defending substantial market share in our target markets, supported by our diversified product portfolio and leading-edge networks,” said chief executive Rupert Pearce.

"This will ensure we are able to fully capitalise on both the immediate and longer-term growth opportunities in these markets.

"Supported by a tightly controlled cost base and an infrastructure capital investment programme which we are confident will meaningfully and sustainably moderate from 2021, we expect to generate sustained free cash flow growth over the medium to long term."

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Thu, 07 Mar 2019 08:30:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/215986/inmarsat-earnings-led-higher-by-demand-for-aviation-broadband-in-fourth-quarter-215986.html
<![CDATA[News - Inmarsat wins contract to provide GX Aviation inflight broadband solution to Indonesian national airline Garuda ]]> https://www.proactiveinvestors.co.uk/companies/news/213591/inmarsat-wins-contract-to-provide-gx-aviation-inflight-broadband-solution-to-indonesian-national-airline-garuda-213591.html Inmarsat Plc (LON:ISAT) has won a contract to provide its GX Aviation inflight broadband solution to Indonesian national airline Garuda, in partnership with wireless technology provider Mahata Aero Teknologi, Lufthansa Technik and Lufthansa Systems.

The FTSE 250-listed global mobile satellite communications group said more than 175 aircraft within the Garuda Indonesia Group will now be equipped with GX Aviation, including Airbus A320s, Airbus A330s, Boeing 737s and Boeing 777s.

READ: Inmarsat shares sink as revenue drops in major Maritime division

It noted that the agreement to supply Garuda Indonesia marks the extension of Mahata's existing 10-year contract with low-cost carrier Citilink, also part of the Garuda Indonesia Group, for the inflight broadband solution.

That service went live on the first Citilink aircraft earlier this month and is scheduled to launch with Garuda later this year. 

Inmarsat said Lufthansa Technik will manage hardware, engineering, installation design and certification for the project, while Lufthansa Systems is responsible for software platform and integration, based on its BoardConnect´s open architecture.

GX Aviation is the world's first and only global, high-speed inflight connectivity service delivered through a wholly-owned and operated network of high-throughput satellites, allowing passengers to seamlessly browse the internet, stream videos, check social media and more during flights.

Philip Balaam, president of Inmarsat Aviation, said: "Asia Pacific has become one of our biggest markets for GX Aviation. The fact that Indonesia's national airline and low-cost carrier have both selected the service within months of each other is a testament to GX Aviation's status as the global benchmark for inflight broadband.”

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Wed, 30 Jan 2019 08:15:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/213591/inmarsat-wins-contract-to-provide-gx-aviation-inflight-broadband-solution-to-indonesian-national-airline-garuda-213591.html
<![CDATA[News - Inmarsat shares sink as revenue drops in major Maritime division ]]> https://www.proactiveinvestors.co.uk/companies/news/208825/inmarsat-shares-sink-as-revenue-drops-in-major-maritime-division-208825.html Shares in Inmarsat Plc (LON:ISAT) sank in mid-morning trading Thursday after an increase in third-quarter earnings was overshadowed by a decline in its major Maritime division.

The FTSE 250 mobile satellite firm reported group underlying earnings (EBITDA) for the period were up 6.8% at US$206.5mln while revenues climbed 3.7% to US$369.3mln.

READ: Inmarsat lifted as it unveils collaboration with Panasonic Avionics

However, despite the relatively positive earnings picture, the group’s Maritime arm, which formed around 36% of its quarterly takings, dropped 5.7% year-on-year to US$135mln which the firm blamed on a decline in its core FleetBroadband revenues reflecting customer migration to its Fleet Xpress system and VSAT competition.

The bleak Maritime figures overshadowed a strong performance in Inmarsat’s Aviation segment, which saw revenues grow 34% to US$68.2mln in the quarter.

Revenues in the group’s Government and Other divisions also grew by 7.7% and 2% respectively, while the Enterprise segment shrank 9.4% which was blamed on a “tough, event-driven, comparative”. 

Looking ahead, the firm left its medium-term guidance unchanged, targeting mid-single-digit percentage revenue growth over the next five years with capital expenditure at between US$500mln and US$600mln a year until 2020.

Rupert Pearce, chief executive of Inmarsat, said the group would accelerate the rate of migration of its FleetBroadband customers to the Fleet Xpress product, adding that the group was “well-placed” to deliver medium-term growth in revenue, EBITDA, and free cash flow.

Shares were down 6.4% at 430.9p.

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Thu, 08 Nov 2018 09:51:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/208825/inmarsat-shares-sink-as-revenue-drops-in-major-maritime-division-208825.html
<![CDATA[News - Inmarsat lifted as it unveils collaboration with Panasonic Avionics ]]> https://www.proactiveinvestors.co.uk/companies/news/205309/inmarsat-lifted-as-it-unveils-collaboration-with-panasonic-avionics-205309.html Inmarsat PLC (LON:ISAT) shares were on the rise in early deals Thursday as it unveiled a strategic collaboration agreement with Panasonic Avionics Corporation to provide in-flight broadband services.

The FTSE 250-mobile and telecoms firm said that under the agreement, which would cover an initial ten-year period, it would become Panasonic’s exclusive provider of Ka-band in-flight connectivity (IFC) for commercial aviation.

READ: Echostar still interested in Inmarsat, claims RBC, but ‘near-term catalysts looking less likely’

This would allow Panasonic to provide access to Inmarsat’s GX Aviation Ka-band satellite network to its current and future customers.

In return, Panasonic would allow Inmarsat to offer its portfolio of services and NEXT solutions to its own commercial aviation customers, including customer support and technical services.

Looking ahead, the company said it would also collaborate with Panasonic to develop a next-generation GX Aviation terminal as well as new connectivity-enabled services, data analytics and technology to improve overall end-to-end performance.

Inmarsat added that the agreement would provide “greater quality, consistency of experience and more choice” to airlines and passengers in the IFC market, which it estimated would be worth US$100bn by 2035.

Rupert Pearce, Inmarsat’s chief executive, said that the move would “build upon the success of the global GX network”, adding that aviation would be “a significant individual growth driver” of the overall business”.

The news may provide the impetus for an increased takeover bid for Inmarsat by US satellite communications firm EchoStar, which had a previous 532p offer rejected over the summer with Inmarsat’s board saying it “very significantly” undervalued the group.

Shares were up 2.5% at 509.6p.

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Thu, 20 Sep 2018 09:09:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/205309/inmarsat-lifted-as-it-unveils-collaboration-with-panasonic-avionics-205309.html
<![CDATA[News - Echostar still interested in Inmarsat, claims RBC, but ‘near-term catalysts looking less likely’ ]]> https://www.proactiveinvestors.co.uk/companies/news/204125/echostar-still-interested-in-inmarsat-claims-rbc-but-near-term-catalysts-looking-less-likely-204125.html Echostar is still interested in buying Inmarsat PLC (LON:ISAT), according to RBC Capital, but the Canadian bank doesn’t expect another offer to be forthcoming any time soon.

Over summer, US-based Echostar made an offer of 532p a share, which Inmarsat’s board dismissed as “very significantly” undervaluing the satellite group.

The offer was withdrawn shortly after, which means Echostar cannot return a new bid for six months, while RBC analyst Wilton Fry also doubts its ability to go much higher than it did before.

READ: Numis knocks Inmarsat down to a ‘sell’

“We believe the strategic rationale for Echostar buying Inmarsat (global presence, Ka-band complementary, L-band and S-band spectrum) remains very valid and Echostar is probably still interested,” said Fry in a research note.

“However, Echostar is constrained not only by the six-month standstill (under rule 2.8) but also by its ability to issue equity given its weak multiple.”

Away from the takeover situation, the analyst has a couple of issues with what he had previously thought were two near-term catalysts for the shares: China and Ligado.

Inmarsat had positioned its fourth GX satellite over China for a few months while it carried out testing, but Fry believes the company “has given up” on the sale to the Chinese government, instead favouring a sale to a US company, possibly in the aviation field.

“We think the market is very unlikely to give the company credit (unless there is a substantial new contract announcement) given its track record to date in aviation,” read this morning’s note.

“By comparison, we had estimated the value of a Chinese wholesale deal would have been an incremental c. £1 per share. If we assume the market had factored in a 30% probability of it being used in China, the downside risk is c.30p.”

Downgrade to ‘sector perform’, PT chopped

As for Ligado, the US network company which pays licence fees to Inmarsat, is still trying to get approval from regulators to use its spectrum terrestrially.

Fry reckons the possibility of that happening has “significantly reduced” due to concern over interference, so he expects no further payments from January 2019.

The analyst moved his rating down to ‘sector perform’ from ‘outperform’, while he also chopped his price target down to 650p (from 725p), claiming that Echostar’s interest will stop shares from falling too far.

Inmarsat shares fell 4.4% to 523p in late morning trading on Tuesday.

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Tue, 04 Sep 2018 11:00:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/204125/echostar-still-interested-in-inmarsat-claims-rbc-but-near-term-catalysts-looking-less-likely-204125.html
<![CDATA[News - Numis knocks Inmarsat down to ‘sell’ as it sees few catalysts for meaningful share movement ]]> https://www.proactiveinvestors.co.uk/companies/news/202203/numis-knocks-inmarsat-down-to-sell-as-it-sees-few-catalysts-for-meaningful-share-movement-202203.html Analysts at City broker Numis have downgraded Inmarsat PLC (LON:ISAT) to ‘sell’ from ‘hold’ as they saw little that could galvanise any changes in its target price.

In a note to clients, the broker said it was “unlikely” to make any meaningful changes to its estimates despite having yet to work through the detail of the FTSE 250 telecoms group’s half-year results.

READ: Inmarsat shares rise as investors await next move after Echostar says won't make an offer

They added that despite the company’s chief executive, Rupert Pearce, saying the offer for the company from US satellite communications company EchoStar Corp “significantly undervalued the company’s prospects”, he did not say anything beyond “what he has highlighted several times before Echostar's approach. Therefore we cannot increase our estimate of ISAT’s NPV [net present value] (which, in turn, determines our Target Price for the stock)”.

Analysts also said that it was “too bullish” to expect Inmarsat’s L-band business, which comprises over 80% of its total business unit sales, to “remain stable, let alone grow”.

In its half-year results on Thursday, Inmarsat swung to a pre-tax loss of US$119.1mln from a US$63.4mln profit in the same period last year despite revenues rising to US$717.2mln from US$683.7mln.

The swing was attributed to a jump in net financing costs, which more than doubled to US$259.8mln from US$121.8mln in the first half of 2017, due to a “significant” increase in the unrealised conversion liability on the 2023 convertible bond following EchoStar's takeover attempt in June.

In lunchtime trading Friday, Inmarsat’s shares were up 4.4% at 561.8p.

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Fri, 03 Aug 2018 13:06:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/202203/numis-knocks-inmarsat-down-to-sell-as-it-sees-few-catalysts-for-meaningful-share-movement-202203.html
<![CDATA[News - Inmarsat shares rise as investors await next move after Echostar says won't make an offer ]]> https://www.proactiveinvestors.co.uk/companies/news/200371/inmarsat-shares-rise-as-investors-await-next-move-after-echostar-says-won-t-make-an-offer-200371.html Inmarsat PLC (LON:ISAT) rose on Monday as investors awaited any next move in the bid saga surrounding the FTSE 250-listed satellites operator.

After the market close on Friday, US rival EchoStar Corporation (NASDAQ:SATS) – which has been building up a stake in the UK group – said it does not intend to make a formal offer for Inmarsat, having seen another indicative proposal rejected by the firm earlier that day.

READ: Inmarsat plunges as it rejects second bid from Echostar worth almost £3.2bn

In a statement in response to the Echostar statement, Inmarsat said its board “remains highly confident in the independent strategy and prospects of Inmarsat, given our track record, unique capabilities, differentiated market position and strong channels to market.”

It added: “Inmarsat will publish its interim year results for the period to 30 June 2018 on 2 August 2018 and will update the market on the Company's progress at that time.”

In late morning trading on Monday, Inmarsat shares were up 4.1% at 503.6p.

In a note to clients, analysts at Morgan Stanley noted: “Inmarsat shares traded below 400p before Echostar made its first approach vs around 500p today and recent highs of 632p.

“Though there may be some disappointment in the market at the lack of an offer when the dust settles, there has been an interested buyer at 532p, Echostar still has a sizeable stake in the company and they theoretically could decide to return after 6-months.”

"Significantly undervalued"

Inmarsat shares plunged on Friday after the satellite group rejected the second offer from US rival Echostar.

The bid, formally lodged on July 3, was a mixture of cash and shares totalling 532p for each Inmarsat share, valuing the FTSE 250 firm at £3.2bn including debt.

Inmarsat responded by claiming that the offer "very significantly undervalued" the company and its prospects.

The London-based company rejected out of hand an initial multi-billion pound approach from Echostar last month.

The US group’s offer was some way below what some analysts had been expecting. RBC Capital said in a note to clients last week that it thought 650p might be the opening offer but expected a bid of around 750p to tempt shareholders.

Politically sensitive

RBC also noted that without a recommendation from the board, an Echostar bid is unlikely to succeed with its approaches.

The Canadian bank said: “Given the political backdrop (sensitive satellite infrastructure) we believe Echostar is likely to need a recommended offer as a hostile bid could allow the company to seek political protection.”

At the end of last month, Eutelsat Communication SA also revealed that it does not intend to make an offer for Inmarsat, just a day after the French satellites group said it was considering making a bid.

The French firm added that it is consequently, bound by the Takeover Code not to make a bid during the following six months except with the consent of the UK Takeover Panel unless Inmarsat’s board agrees, or a third party announces a firm intention to make an offer.

Echostar has to adhere to the same Takeover Code rules.

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Mon, 09 Jul 2018 11:43:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/200371/inmarsat-shares-rise-as-investors-await-next-move-after-echostar-says-won-t-make-an-offer-200371.html
<![CDATA[News - Inmarsat plunges as it rejects second bid from Echostar worth almost £3.2bn ]]> https://www.proactiveinvestors.co.uk/companies/news/200264/inmarsat-plunges-as-it-rejects-second-bid-from-echostar-worth-almost-32bn-200264.html Shares in Inmarsat Plc (LON:ISAT) plunged on Friday after the satellite group rejected a second offer from US rival Echostar.

The bid, formally lodged on Tuesday (July 3), was a mixture of cash and shares totalling 532p for each Inmarsat share, valuing the FTSE 250 firm at £3.2bn including debt.

“EchoStar believes that the improved proposal presents a compelling opportunity for Inmarsat's shareholders to realise certain value from their investment in Inmarsat while also participating meaningfully in the upside potential of the combined company,” read a stock market announcement this morning.

Inmarsat responded by claiming that the offer "very significantly undervalued" the company and its prospects.

It added: “The board remains highly confident in the independent strategy and prospects of Inmarsat.”

Shares fell 10% to 4.75p in early deals, as investors responded to Inmarsat's seeming unwillingness to engage in takeover talks.

READ: Mixed opinions on Inmarsat’s bid rejection

The London-based company rejected out of hand an initial multi-billion pound approach last month, claiming it “significantly undervalued” the company.

Despite the latest setback today, Echostar is not giving up, explaining in a stock market announcement that it is seeking further discussions with Inmarsat bosses “on a constructive basis”.

The latest 532p-a-share offer is some way below what analysts had been expecting.

RBC Capital said in a note to clients earlier this week that it thought 650p might be the opening offer but expected a bid of around 750p to tempt shareholders.

Without a recommendation from the board, RBC said Echostar is unlikely to succeed with its approaches.

“Given the political backdrop (sensitive satellite infrastructure) we believe Echostar is likely to need a recommended offer as a hostile bid could allow the company to seek political protection.”

--Updates for share price and Inmarsat response--

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Fri, 06 Jul 2018 07:56:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/200264/inmarsat-plunges-as-it-rejects-second-bid-from-echostar-worth-almost-32bn-200264.html
<![CDATA[News - Inmarsat up as clock counts down until the deadline for Echostar to make bid for satellites rival ]]> https://www.proactiveinvestors.co.uk/companies/news/200130/inmarsat-up-as-clock-counts-down-until-the-deadline-for-echostar-to-make-bid-for-satellites-rival-200130.html Inmarsat Plc (LON:ISAT) saw its shares gain on Wednesday with the clock counting down until the deadline for Echostar Corp. (NASDAQ:SATS) to make a bid for its satellites rival.

Echostar has until 5pm BST on Friday, July 6 to make a firm offer for Inmarsat under the UK Takeover Panel's rules or face a six-month ban from bidding.

READ: Inmarsat shares come back down to earth as Eutelsat says does not intend to make an offer

In a note to clients, analysts at RBC Capital said that there is a high probability that Echostar will make a formal offer for Inmarsat, with an initial bid of around 650p a share.

In lunchtime trading, Inmarsat shares were changing hands at 528p each, up 3.3% on Tuesday’s close.

However, the RBC analysts said: “Whatever the initial offer, we think it will take an offer of at least 750p to gain any board or shareholder approval.”

And, they added: “Given the political backdrop (sensitive satellite infrastructure) we believe Echostar is likely to need a recommended offer as a hostile bid could allow the company to seek political protection.”

Looking at potential counter-bidders, the RBC analysts said they would also consider Japan’s SoftBank as a very credible bidder given its investment in satellite operator OneWeb, its previous attempt to buy rival Intelsat, and its global Internet of Things  strategy and connections to Ligado – the company developing a satellite-terrestrial network to support 5G and IoT applications in North America

The analysts concluded that although regulatory uncertainty may keep the bid spread wide (c.15%), they reiterated an ‘outperform’ rating and 850p price target on Inmarsat shares.

No Eutelsat offer

At the end of last month, Eutelsat Communication SA revealed that it does not intend to make an offer for Inmarsat, just a day after the French satellites group said it was considering making a bid.

The French firm added that it is consequently, bound by the Takeover Code not to make a bid during the following six months except with the consent of the UK Takeover Panel unless Inmarsat’s board agrees, or a third party announces a firm intention to make an offer.

At the start of June, Inmarsat revealed it had rejected a takeover approach from Echostar, which has been building a stake in the UK firm, saying it believed the offer “significantly undervalued” the company.

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Wed, 04 Jul 2018 12:45:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/200130/inmarsat-up-as-clock-counts-down-until-the-deadline-for-echostar-to-make-bid-for-satellites-rival-200130.html
<![CDATA[News - Inmarsat shares come back down to earth as Eutelsat says does not intend to make an offer ]]> https://www.proactiveinvestors.co.uk/companies/news/199560/inmarsat-shares-come-back-down-to-earth-as-eutelsat-says-does-not-intend-to-make-an-offer-199560.html Inmarsat PLC (LON:ISAT) shares came back down to earth today, falling after Eutelsat Communication SA said it does not intend to make an offer for the UK-listed firm, just a day after the French satellites group said it was considering making a bid.

In a statement, Eutelsat said that, following market rumours, it had made yesterday’s statement confirming that it was considering a possible offer for Inmarsat, at the request of the UK Panel on Takeovers and Mergers, without any certainty that an offer would be made.

READ: Inmarsat shares launched higher after French satellites firm Eutelsat says considering takeover move

But, the French firm, added, it does not intend to make an offer for Inmarsat and is now consequently, bound by the Takeover Code not to make a bid during the following six months except with the consent of the panel unless Inmarsat’s board agrees, or a third party announces a firm intention to make an offer.

Earlier this month, Inmarsat rejected a takeover approach from US-based EchoStar Corp (NASDAQ:SATS) which has been building a stake in the UK firm.

The FTSE 250-listed firm said it believed Echostar’s offer “significantly undervalued” the company. Inmarsat has made no comment on Eutelsat’s statements.

Having gained around 4.6% after the Eutelsat announcement yesterday, Inmarsat shares lost 5.2% at 599.6p in early morning trading today.

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Tue, 26 Jun 2018 08:43:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/199560/inmarsat-shares-come-back-down-to-earth-as-eutelsat-says-does-not-intend-to-make-an-offer-199560.html
<![CDATA[News - Inmarsat shares launched higher after French satellites firm Eutelsat says considering takeover move ]]> https://www.proactiveinvestors.co.uk/companies/news/199517/inmarsat-shares-launched-higher-after-french-satellites-firm-eutelsat-says-considering-takeover-move-199517.html Inmarsat Plc (LON:ISAT) shares rose on Monday after French satellites company Eutelsat revealed that it is considering launching an offer for its UK-listed rival.

In a brief statement, Eutelsat confirmed that it is “currently evaluating a possible offer for Inmarsat" but said there was no certainty an offer would be made.

READ: Mixed opinions on Inmarsat following rejection of EchoStar offer

Earlier this month, Inmarsat rejected a takeover approach from US-based EchoStar Corp (NASDAQ:SATS) which has been building a stake in the UK firm.

The FTSE 250-listed firm said it believed Echostar’s offer “significantly undervalued” the company

In late afternoon trading, Inmarsat shares were 4.7% higher at 634.6p, with the company yet to respond to Eutelsat’s statement.

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Mon, 25 Jun 2018 16:11:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/199517/inmarsat-shares-launched-higher-after-french-satellites-firm-eutelsat-says-considering-takeover-move-199517.html
<![CDATA[News - Mixed opinions on Inmarsat following rejection of EchoStar offer ]]> https://www.proactiveinvestors.co.uk/companies/news/198605/mixed-opinions-on-inmarsat-following-rejection-of-echostar-offer-198605.html Brokers have issued some mixed opinions on the potential of Inmarsat PLC’s (LON:ISAT) shares following news of a rejected takeover offer by US satellite communications corporation EchoStar.

In a note to clients, Canadian bank RBC upped its price target for the FTSE 250-telecoms company to 850p from 725p, saying: “We estimate Inmarsat's spectrum is worth c.£10 per share, split European S-band (£3.25), US L-band (£5.00), Global Lband (£1.55). Spectrum is extremely important to Echostar and its sister company DISH (both controlled by Charlie Ergen).”

READ: Inmarsat in a spin as its global maritime distress safety systems services monopoly is broken

“We estimate there are US$3.7bn of potential synergies with significant revenue, cost and capex synergies … Inmarsat has been trading at the bottom of its historical trading range of 6.5-12x EBITDA. However, it has now attracted a bid from Echostar, which it has rejected. We believe the situation could become a bidding war between multiple potential bidders” they added.

Inmarsat confirmed it had been approached with a takeover offer by EchoStar last Friday after its share price jumped 13.5%, however it said the offer had “significantly undervalued” the company, in another episode that is likely to fuel concerns around the takeover of leading British businesses following a hostile takeover of aeronautics manufacturer GKN by turnaround specialist Melrose Industries PLC (LON:MRO) earlier this year.

However, RBC’s sentiments were not echoed by City broker Numis, who issued a much more cautious note on Inmarsat following the takeover bids rejection and cut its target price to 430p from 450p.

Analysts at Numis said they did not believe EchoStar would follow through with a formal offer for the company: “Echostar overlaps little with ISAT's business so cost savings will be minor; it has no real involvement in L-band businesses (>80% of ISAT's sales) so revenue synergies will be minor also. In addition, Echostar may have to give up its European S-band license as ISAT owns the other of the two.”

They also highlighted payment uncertainty from Ligado, a company that Inmarsat leases its spare US spectrum to: “Last month, Ligado made a concession to reduce risk of services over its spectrum interfering with military aviation. This may or may not pacify US government agencies; even if it does, there is no set date for the FCC to reconsider giving Ligado its license back. Also, we think Ligado then wants to sell its license rather than build a network”.

Ian Forrest, investment research analyst at The Share Centre, commented: “While the shares have risen back to their highest point of the year, they are still trading 35% below where they were this time a year ago. The steep fall is clearly a big part of the reason behind EchoStar’s bid, but they will have to raise their offer to have a chance of being successful.

He added: “We retain our ‘buy’ recommendation as we believe that longer term attractions still remain with the shares. Orders from the Aviation division are increasing, government spending is once again picking up and the worst seems to be over in their Maritime division.  Having said that the market has already expressed its fears regarding the sustainability of the dividend and so the shares are suitable for investors taking a contrarian approach and willing to accept a higher level of risk.”

In lunchtime trading Monday, Inmarsat shares were up 13.3% to 537p.

--Adds analyst comment and updates share price--

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Mon, 11 Jun 2018 11:30:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/198605/mixed-opinions-on-inmarsat-following-rejection-of-echostar-offer-198605.html
<![CDATA[News - Inmarsat in a spin as its global maritime distress safety systems services monopoly is broken ]]> https://www.proactiveinvestors.co.uk/companies/news/197465/inmarsat-in-a-spin-as-its-global-maritime-distress-safety-systems-services-monopoly-is-broken-197465.html The International Maritime Organization has certified Iridium Communications Inc to provide global maritime distress safety systems services, breaking a monopoly held by Inmarsat PLC (LON:ISAT).

Shares in Inmarsat fell 8.4% in morning trading in London following the decision.

READ: Inmarsat shares rocket as satellites firm reiterates “all elements” of future guidance, first-quarter revenue rises​

Iridium (NASDAQ:IRDM) said the IMO’s Maritime Safety Committee (MSC) stipulated that the Iridium network meets all the criteria needed to provide mobile satellite services in the global maritime distress safety systems services (GMDSS).

“This is a significant achievement that ends a decades-long satellite industry monopoly in which only one company was authorized to provide satellite GMDSS service and for the first time will bring competition and truly global coverage, to mariners sailing any of the world’s oceans,” Iridium’s statement said.

“This is a historic moment for the maritime industry and an honour for Iridium to be the second ever recognized provider for GMDSS services,” said Bryan Hartin, executive vice president, Iridium.

“This is the dawn of a new era for mariner safety. We’ll bring a new choice and upgraded capabilities for mariners along with our truly global coverage that will for the first time extend the reach of satellite-based GMDSS to even the most remote waterways,” he pledged.

In a stock market statement issued by Inmarsat, the London-listed firm acknowledged the introduction of a GMDSS service by Iridium but noted it was subject to Iridium passing a number of stringent performance tests.

“The Iridium GMDSS solution is consequently expected to be made available in the early 2020s. The IMO further approved the request of BeiDou Navigation Satellite System (BDS), a Chinese satellite navigation system, for evaluation of its GMDSS proposal by the IMO's Navigation, Communications and Search and Rescue (NCSR) sub-committee,” Inmarsat’s statement added.

Ronald Spithout, the president of Inmarsat Marine, was in a magnanimous mood, offering his congratulations to Iridium and BeiDou.

"Together, we must strive to maintain and enhance the exceptionally high standards required by the IMO and demanded by the maritime industry as the lifeline for seafarers at sea," he said.

Impact will not be felt for some time

RBC Capital reckons the impact of the IMO ruling will not be felt for some time.

“We believe it is unlikely that ship owners will rip out existing Inmarsat terminals (to replace with Iridium). All the evidence on ship owner/manager terminal replacement across the industry suggests very slow adoption. We expect Iridium will target new ships entering service from 2020,” it said.

“GMDSS does not generate any revenues for Inmarsat, as the service is free to use and the hardware/terminals are provided by third parties; however, all large ship owners are compelled to have GMDSS systems on board, which means Inmarsat is onboard every large commercial ship. This means a ship owner has a choice – either to use the (GMDSS approved) Inmarsat terminal for voice and data or to install an extra satellite system for voice and data (leaving the Inmarsat system for emergencies only). Clearly, losing the monopoly lowers the barrier to entry for Iridium long term,” it said.

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Tue, 22 May 2018 12:55:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/197465/inmarsat-in-a-spin-as-its-global-maritime-distress-safety-systems-services-monopoly-is-broken-197465.html
<![CDATA[News - Inmarsat shares rocket as satellites firm reiterates “all elements” of future guidance, first-quarter revenue rises ]]> https://www.proactiveinvestors.co.uk/companies/news/196246/inmarsat-shares-rocket-as-satellites-firm-reiterates-all-elements-of-future-guidance-first-quarter-revenue-rises-196246.html Inmarsat PLC (LON:ISAT) shares rose nearly 10% higher on Wednesday after the satellites communications provider reiterated “all elements” of its future guidance as it reported a rise in first-quarter revenue.

The FTSE 250-listed firm saw its quarterly revenue rise by 4.8% to US$345.4mln, up from US$329.5mln a year earlier, though its underlying earnings (EBITDA) fell by 4.5% to US$174.9mln from US$183.1mln.

READ: Inmarsat shares drop as it cuts dividend and reports decline in full-year earnings

The group said in a statement that the EBITDA fall reflected changes in revenue mix, particularly in the Government area, and an adverse impact of currency movements on indirect costs of US$9.1mln.

Within divisions, Inmarsat said its Maritime revenue rose by 1.6%, Aviation climbed 39% and Enterprise rose 11.2%, though Government fell by 9.0%,

Inmarsat said it remains confident for its growth outlook and reiterated "all elements of our future guidance", including the expectation that revenue in 2018 - excluding Ligado - will be between US$1.30bn to US$1.50bn.

Inmarsat’s chief executive, Rupert Pearce commented: "Given our track record, unique capabilities, differentiated market position and strong channels to market, we are increasingly well placed to deliver further annual revenue growth across all of our target Maritime, Government, Aviation and Enterprise markets.”

In lunchtime trading, Inmarsat shares topped the mid-cap gainers, up 9.7% at 396.9p.

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Wed, 02 May 2018 12:14:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/196246/inmarsat-shares-rocket-as-satellites-firm-reiterates-all-elements-of-future-guidance-first-quarter-revenue-rises-196246.html
<![CDATA[News - Numis upgrades Inmarsat’s rating to ‘hold’ from ‘sell' after recent results, but stays cautious ]]> https://www.proactiveinvestors.co.uk/companies/news/192990/numis-upgrades-inmarsats-rating-to-hold-from-sell-after-recent-results-but-stays-cautious-192990.html Numis Securities has upgraded its rating for Inmarsat PLC (LON:ISAT) to ‘hold’ from ‘sell' after raising its price target following the satellite operator’s recent full-year results, but the shares still retreated as it remains cautious on the stock.

The City broker increased its target price for the FTSE 250-listed firm to 450p from 400p, with the shares changing hands at 431.8p each in mid-morning trading, down 0.2%.

READ: Inmarsat shares drop as it cuts dividend and reports decline in full-year earnings

In a note to clients, Numis’s analysts said: “We still lack confidence that ISAT's terminal year capex will be materially below US$500mln pa (per annum) and, linked to this, that sales growth from inflight connectivity (IFC) contracts will earn good ROIs (return on investments) after also including a fair share of the US$1.6bn+ already spent on the global GX (fast broadband) network.”

They added: “Also, we still think that (likely unchanged) consensus estimates for Maritime sales growth are high. Lastly, on our new estimates, ISAT's 60%+ lower DPS will remain uncovered by FCF until FY21.”

The analysts also reduced their group underlying earnings (EBITDA) estimates for Inmarsat by 2%, 3%, and 5% respectively for full-year 2018 through to full-year 2021, mainly because they now forecast slower revenue growth for the group’s Government business, which represented 25% of its EBITDA in full-year 2017.

They noted: “Government is a 'lumpy' business but also ISAT, in effect, said that the 'take' part of its take-or-pay contract with Boeing is not growing fast enough.”

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Mon, 12 Mar 2018 10:15:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/192990/numis-upgrades-inmarsats-rating-to-hold-from-sell-after-recent-results-but-stays-cautious-192990.html
<![CDATA[News - Inmarsat shares drop as it cuts dividend and reports decline in full year earnings ]]> https://www.proactiveinvestors.co.uk/companies/news/192911/inmarsat-shares-drop-as-it-cuts-dividend-and-reports-decline-in-full-year-earnings-192911.html Inmarsat Plc (LON:ISAT) shares shed 7% on Friday after the satellite company cut its full-year dividend due to uncertainty over future payments from Ligado Networks and its plans to invest in the aviation market.

The company proposed a final dividend of 12 US cents per share for the 2017 fiscal year, bringing the total for the year to 33.62 cents, down from the 53.96 cents paid the previous year.

In late afternoon trading, the FTSE 250-listed stock was 7.1% lower at 430.9p.

READ: Inmarsat maintains full-year guidance despite "challenging" markets

Inmarsat said it needs sufficient financial resources to support its investment to upgrade its in-flight connectivity infrastructure to provide wifi to the aviation market.

It added that there was a lack of visibility over future cash payments from its contract with US satellite communications company Ligado Networks beyond the end of this year.

The group entered into a cooperation agreement with Ligado, formerly LightSquared, in 2007 as part of Ligado’s plans to develop a 4G network integrated with satellite coverage in the US.

Payments from Ligado will pause in 2019 and then resume in 2020 at about US$136mln per year and grow thereafter at a 3% compound rate over the next 99 years, Inmarsat said.

Full-year earnings drop but revenues rise

Inmarsat reported an 8% decline in underlying earnings (EBITDA) to US$731.5mln in the year to March 9, 2018, reflecting higher costs involved in capturing a greater share in its key markets.

Excluding a one-off restructuring charge of US$19.9mln, adjusted EBITDA dropped 5.5% to US$751.4mln.

Group revenue rose 5.4% to £1.2bn as growth in the aviation and government services segments offset declines in the maritime and enterprise divisions.

"Given Inmarsat's track record, unique capabilities and differentiated market position, we are well placed to continue to grow our revenues in 2018 and beyond and to capture significant additional medium-term growth opportunities available to us, particularly in in-flight connectivity,” said chief executive Rupert Pearce.

Capex guidance means more cash out the door

The company maintained its guidance for 2018 revenue, excluding Ligado, of US$1.3bn to US$1.5bn. Between 2018 to 2020, the group expects capital expenditure of US$500m to US$600m per year.

"This means more cash out the door and, in the take-no-prisoners world of results-day digestion and share price reaction, remember that revenues are vanity, profits are sanity but cash flow is reality. And if the spending doesn’t pay off…," said Mike van Dulken, head of research at Accendo Markets.

 -- Updates share price --

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Fri, 09 Mar 2018 08:02:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/192911/inmarsat-shares-drop-as-it-cuts-dividend-and-reports-decline-in-full-year-earnings-192911.html
<![CDATA[News - Inmarsat shares move out of orbit as Goldman Sachs downgrades rating to ‘neutral’ from ‘buy’ ]]> https://www.proactiveinvestors.co.uk/companies/news/188579/inmarsat-shares-move-out-of-orbit-as-goldman-sachs-downgrades-rating-to-neutral-from-buy-188579.html Inmarsat PLC (LON:ISAT) saw its shares move out of orbit today after Goldman Sachs downgraded its stance for the satellites operator to ‘neutral’ from ‘buy’ after cutting its estimates and target price.

The US investment bank reduced its medium-term revenue/underlying earnings (EBITDA) estimates by 3% and 8%, respectively, and decreased its 12-month price target to 580p from 860p.

READ: Inmarsat maintains full-year guidance despite "challenging" markets

In mid-morning trading, Inmarsat shares were 4.2%, or 20.20p lower at 465.6p.

In a note to clients, Goldman’s analysts said: "ISAT is facing higher costs associated with building out its inflight connectivity business (now 1,300 planes contracted), limited recovery in maritime and legacy declines."

They added: “We expect near-term momentum to be impacted by the ongoing debate around the dividend (which has broadly been uncovered by FCF since 2011) and see limited scope for positive earnings momentum until late 2018.”

The analysts also noted that, since being added to their buy list in August 2016, Inmarsat shares are down around 43% versus the FTSE World Europe index – up around 15% - driven by earnings downgrades as aero costs increased and revenue headwinds have persisted.

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Mon, 11 Dec 2017 10:10:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/188579/inmarsat-shares-move-out-of-orbit-as-goldman-sachs-downgrades-rating-to-neutral-from-buy-188579.html
<![CDATA[News - Inmarsat maintains full-year guidance despite "challenging" markets ]]> https://www.proactiveinvestors.co.uk/companies/news/181912/inmarsat-maintains-full-year-guidance-despite-challenging-markets-181912.html Satellite services provider Inmarsat PLC (LON:ISAT) kept its full-year guidance unchanged after a tough second quarter.

Underlying earnings (EBITDA) fell 3.6% to US$195.0mln from US$202.2mln the year before, despite a 7.7% increase in revenue to US$356.0mln from US$330.4mln the previous year.

Reported profit before tax slumped to US$61.2mln from US$95.9mln, in part because of a US$13.9mln non-cash charge relating to convertible bonds.

READ: Inmarsat unit chosen to provide satellite communications for US FirstNet emergency network

The company upped its interim dividend by 5% to 21.62 US cents from 20.59 US cents previously.

The company said it remained confident about the medium-to-long-term outlook but the short-term picture is a bit cloudier for the satellites launcher.

“Our markets remain challenging and the outlook continues to be difficult to predict. Inmarsat's performance in 2017 and 2018 will continue to be particularly determined by our results in the IFC [in-flight connectivity] market and in the government sector, as we outlined at our 2016 preliminary results in March 2017,” the company said.

Shares in Inmarsat fell 3.2% in the first hour of trading.

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Thu, 03 Aug 2017 09:07:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/181912/inmarsat-maintains-full-year-guidance-despite-challenging-markets-181912.html
<![CDATA[News - Barclays Capital pushes Inmarsat shares out of orbit with a downgrade after recent results ]]> https://www.proactiveinvestors.co.uk/companies/news/177370/barclays-capital-pushes-inmarsat-shares-out-of-orbit-with-a-downgrade-after-recent-results-177370.html Barclays Capital pushed shares in satellites operator Inmarsat Plc (LON:ISAT) out of orbit today, downgrading them despite the firm recently reporting a “solid set” of first-quarter numbers.

The broker cut its stance on the FTSE 250-listed firm to ‘underweight’ from ‘equal-weight’ while raising the target price to 750p from 710p and upping estimates.

That was still well below Inmarsat’s current share price of 774p, which was down over 6%, or 50.5p in mid-morning trading, curtailing a post-update rally.

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In a note to clients, BarCap’s analysts said: “With the stock having recovered from its lows, the valuation now looks unappealing.”

They noted that Inmarsat’s first-quarter results made “for a second consecutive positive print.”

The analysts added: “Combined with GX contract announcements over the past six months, we see ISAT well set for a revenue recovery and to meet its 2017-18 guidance.”

“However,” they continued, “our midterm concerns remain: supply is set to increase materially whilst demand growth should be more volatile; technological obsolescence is a question mark with VHTS around the corner (V-2 launch expected in June).” 

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Fri, 05 May 2017 10:07:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/177370/barclays-capital-pushes-inmarsat-shares-out-of-orbit-with-a-downgrade-after-recent-results-177370.html
<![CDATA[News - Inmarsat unit chosen to provide satellite communications for US FirstNet emergency network ]]> https://www.proactiveinvestors.co.uk/companies/news/175737/inmarsat-unit-chosen-to-provide-satellite-communications-for-us-firstnet-emergency-network-175737.html Satellites operator Inmarsat Plc (LON:ISAT) said its Inmarsat Government subsidiary has been selected by US telecoms giant AT&T Inc (NYSE: T) as a core team member for the US FirstNet emergency services network.

The FTSE 250-listed firm said Inmarsat Government will work with AT&T to deliver satellite communication solutions as part of the network.

FirstNet, the shortened name for the First Responder Network Authority is an independent agency under the US Department of Commerce.

Its public safety mission is to build, operate and maintain the first US high-speed, nationwide wireless broadband network dedicated to police, firefighters and emergency medical services.

In early trading, Inmarsat shares gained 1.7%, or 14.0p at 849.5p.

 -- Adds share pice --

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Fri, 31 Mar 2017 07:42:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/175737/inmarsat-unit-chosen-to-provide-satellite-communications-for-us-firstnet-emergency-network-175737.html
<![CDATA[News - Inmarsat sees revenues jump despite earnings slump in its biggest division ]]> https://www.proactiveinvestors.co.uk/companies/news/174439/inmarsat-sees-revenues-jump-despite-earnings-slump-in-its-biggest-division-174439.html It was a mixed bag for satellite company Inmarsat Plc (LON:ISAT) this morning as a boost in its aviation and government divisions helped to mask the fact that its largest business, maritime, was down for  the second straight year.

Group revenue for the 12 months to 31 December 2016 jumped 4.3% to £1.33bn (2015: £1.27bn), buoyed by a 12.5% rise in aviation revenues (£142.6mln) and a 15% increase in revenues from its government division (£126.8mln).

The firm’s agreement with Ligado Networks – which it upgraded last summer – also raked in US$119.4mln, well up on the £88.6mln the tie-up generated last year.

Those strong performers helped to paper over the cracks of its maritime business – the largest division within Inmarsat – which contracted for the second year in a row.

“Challenging markets” were to blame as revenues in the business slipped 3% year-on-year to £575.3mln, Inmarsat told investors.

The enterprise side of the business – which includes oil and gas services and Internet of Things – also dipped by a little over 9% to £144.6mln as a result of “relatively weak demand in all of its key markets”.

The net result of all that is a 5% increase in the final dividend to 33.37 cents per share (2015: 31.78 cents).

“Despite a challenging operating environment in our markets, we delivered a robust performance in 2016,” said chief executive Rupert Pearce.

“As a result, Inmarsat remains well-positioned to take advantage of a number of significant growth opportunities in the coming years.”

Inmarsat – which provides broadband and communications via satellites for boats, aircraft and remote locations – is forecasting revenues of between US$1.2bn and £1.3bn, excluding Ligado, for 2017.

Inmarsat to supply IAG planes with in-cabin Wi-Fi

In a separate announcement, British Airways owner International Consolidated Airlines Group PLC (LON:IAG) was confirmed as the launch customer for Inmarsat’s European Aviation Network (EAN) high-speed in-flight broadband services.

Inmarsat said the technology will “revolutionise the onboard experience for airline passengers”.

The EAN will allow European passengers to use their personal devices to surf the web, stream videos and play online games.

IAG will equip more than 300 of its aircraft with the technology and aims to have 90% of its short haul fleet kitted out by early 2019.

Leo Mondale, President of Inmarsat Aviation, said: “The rollout of our European Aviation Network is progressing at full pace and today's contract signing with IAG as our launch customer has reinforced once again how Inmarsat's aviation strategy is coming together.”

The satellite that will enable the improved Wi-Fi services is expected to be launched at some point in the middle of 2017.

Lufthansa and Air New Zealand are among several other customers who are reportedly signed up and awaiting installation.

Inmarsat shares added 6% in early deals to 730p.

--Updates for IAG deal and share price--

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Wed, 08 Mar 2017 07:48:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/174439/inmarsat-sees-revenues-jump-despite-earnings-slump-in-its-biggest-division-174439.html
<![CDATA[News - Inmarsat in maritime sat-com deal with Satlink Satellite Communications ]]> https://www.proactiveinvestors.co.uk/companies/news/173111/inmarsat-in-maritime-sat-com-deal-with-satlink-satellite-communications-173111.html Satellite communications specialists Inmarsat Plc (LON:ISAT) and Satlink Satellite Communications are teaming up to provide comms services for vessels at sea.

Satlink’s kit is widely used by naval vessels. The deal will see Inmarsat’s Fleet Xpress service integrated in Satlink’s service portfolio.

Inmarsat said the deal would see more than 1,500 additional vessels using the Fleet Xpress service over the next five years.

"We are seeing an unprecedented uptake of the Fleet Xpress service since its launch last year, and by working with Satlink, we are able to extend our global reach and expertise to the market,” said Ronald Spithout, president of Inmarsat Maritime.

“The connected ship is no longer a concept, but now rapidly becoming a reality. With our, world-leading, high-speed broadband connectivity and a dedicated partner network, together we are revolutionising the industry and delivering tangible benefits in terms of vessel performance, driving operational efficiencies and improving the wellbeing of the crew," he added.

Socrates Theodossiou, joint managing director of the Tototheo Group, which owns Satlink, said the group was delighted to deepen its existing relationship with Inmarsat.

“With this strategic alliance we look forward to utilising the innovative and dependable capabilities of Fleet Xpress for the increasing requirements of our customers in regards to broadband connectivity, and to enhance ship efficiency, crew welfare and the implementation of various 'connected ship' applications," Theodossiou said.

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Tue, 14 Feb 2017 07:40:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/173111/inmarsat-in-maritime-sat-com-deal-with-satlink-satellite-communications-173111.html
<![CDATA[News - Inmarsat heads higher as third quarter revenues pick up ]]> https://www.proactiveinvestors.co.uk/companies/news/168474/inmarsat-heads-higher-as-third-quarter-revenues-pick-up-168474.html Shares in Inmarsat Plc (LON:ISAT) were moon-bound on Thursday morning as the satellite services provider reported an increase in third quarter revenues.

Market conditions remain tough, the company said, but it managed to increase group revenues by 5% in the third quarter to US$341.9mln from US323.1mln the year before, despite a slide in turnover at its biggest division, Maritime.

Maritime’s revenue was off 4.9% from a year earlier at US$142.8mln, but the decline was offset by a 9.8% increase in revenue from government agencies.

The other star performer was the Aviation division, where revenue rose 10.1% year-on-year to US$35.9mln.

Despite the improvement in the top line, profit before tax fell to US$52.5mln from US$84.2mln in the same period of 2015.

“In Maritime, whilst headline revenues were down 5% against a strong Q3 last year, we continued to see good growth in VSAT revenues (Fleet Xpress and XpressLink) with installations of Fleet Xpress now starting to increase,” said Rupert Pearce, chief executive officer of Inmarsat.

“Aviation delivered another solid quarter of double digit growth. Customer interest in the Inmarsat cabin connectivity offering continued to firm up, with IAG, Air New Zealand and another major European airline all recently confirming that they would be using Inmarsat GX and / or EAN connectivity services,” Pearce added.

“Despite declining government expenditure generally, Government has continued to grow both in the US, driven by GX, and outside the US, where operational tempo has continued to be strong. Enterprise, however, had another tough quarter, with little 'event driven' activity and softer demand, particularly in the Energy and Media markets,” Pearce said.

Revenue guidance for the full year and next has been left unchanged.

Shares were 10.3% at 805p towards the end of the morning trading session.

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Thu, 03 Nov 2016 11:10:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/168474/inmarsat-heads-higher-as-third-quarter-revenues-pick-up-168474.html
<![CDATA[News - Inmarsat places US$650mln bonds to fund buyback ]]> https://www.proactiveinvestors.co.uk/companies/news/129902/inmarsat-places-us650mln-bonds-to-fund-buyback-129902.html Inmarsat Plc (LON:ISAT) reported a considerable demand for new bonds, having placed US$650mln convertible bonds due 2023, representing an additional US$50mln over the announced deal size.

The satellite communications provider said the net proceeds of the issue of the new bonds will be used primarily to fund the approximate US$390mln repurchase of the outstanding 1.75% US$287.7mln convertible bonds due 2017.

“The remaining proceeds will further strengthen Inmarsat's financial position and support its strategy of continued investment in innovation and the delivery of global mobile satellite service solutions, where Inmarsat continues to see opportunities for sustained profitable growth,” said the group in a statement Thursday.

Settlement and delivery of the new bonds is expected to take place on 9 September 2016.

It is intended that application will be made for the new bonds to be listed on the Channel Islands Securities Exchange or another recognised stock exchange and the Open Market of the Frankfurt Stock Exchange prior to the first interest payment date.

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Thu, 01 Sep 2016 07:51:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/129902/inmarsat-places-us650mln-bonds-to-fund-buyback-129902.html
<![CDATA[News - Inmarsat boasts return to growth in second quarter ]]> https://www.proactiveinvestors.co.uk/companies/news/129007/inmarsat-boasts-return-to-growth-in-second-quarter-129007.html Inmarsat Plc (LON:ISAT) told investors it returned to growth in the second quarter, and that it had “more than compensated” for a softer start to the year.

Second quarter revenue was up US$19mln, or 6.1%, compared to the same period last year and amounted to US$330mln - with the Aviation and Ligado Networks businesses driving the improvement.

Earnings rose US$36.3mln, 21.9%, to US$202.2mln versus US$165.9mln in the same quarter last year, while at US$76.8mln profit after tax was up 41.7%.

The half year comparatives reveal a US$12.8mln, 2.1%, rise in revenue to US$629mln and a 7.5% increase in earnings to US$368.4mln.

Chief executive Rupert Pearce said the group’s markets continue to be challenging and highlighted that the outlook is “becoming much harder to call”. He noted that the macro economic environment is worsening, new satellite capacity is pushing prices down.

Pearce added that Inmarsat’s targeted aviation passenger connectivity market is still being established and the launch of the group’s GX – its ‘Global Xpress’ broadband - products is ongoing.

"We continue to compete aggressively and successfully in all of our core markets and to make solid progress with our long term GX and Aviation growth agendas,” he said.

In separate statements the satellite communications group evidently underlined its progress bringing in new business.

One statement revealed that marine focussed communications firm Navarino has committed more than 1,200 vessels to Inmarsat’s naval offering under the GX service. The signups are to be phased over a six year period.

Another statement details a new contract award for US Navy satellite services.

Inmarsat also told investors that it is increasing its interim dividend to 20.59 cents per share.

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Thu, 04 Aug 2016 09:05:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/129007/inmarsat-boasts-return-to-growth-in-second-quarter-129007.html
<![CDATA[News - Inmarsat successfully launches third global broadband satellite ]]> https://www.proactiveinvestors.co.uk/companies/news/110401/inmarsat-successfully-launches-third-global-broadband-satellite-110401.html Satellite telecoms group Inmarsat (LON:ISAT) has confirmed the successful launch into orbit of the third satellite in a project to provide global broadband services.

Inmarsat said its I-5 F3 Global Xpress satellite, which was launched from the Baikonur Cosmodrome in Kazakhstan at 12.44pm (BST), entered orbit on Monday morning at 4.15am following a 15-hour and 31 minute mission.

After further work in the coming weeks, I-5 F3 will be ready to join the first two GX satellites, which are already in orbit and operating successfully, to create the first, globally available, high-speed mobile broadband network offered by a single operator.

Chief executive Rupert Pearce said: "We have been working towards this day ever since we announced plans to create the Global Xpress constellation in 2010. I am delighted that we now have three Global Xpress satellites in orbit, enabling us to provide global GX services by the end of the year.

"This is a significant milestone for Inmarsat; one that will offer major growth opportunities and promises to change the face of our industry."

The first Global Xpress satellite - I-5 F1 - was launched in December 2013 and entered commercial service in July 2014, covering Europe, the Middle East, Africa and Asia.

This was followed by the launch of I-5 F2 on February 1, which covers the Americas and the Atlantic Ocean and entered commercial service last month.

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Tue, 01 Sep 2015 07:30:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/110401/inmarsat-successfully-launches-third-global-broadband-satellite-110401.html
<![CDATA[News - Inmarsat riding high on news flow, says Nomura ]]> https://www.proactiveinvestors.co.uk/companies/news/110340/inmarsat-riding-high-on-news-flow-says-nomura-110340.html Japanese broker Nomura homes in on satellite giant Inmarsat (LON:ISA), shunting up the target price to 900p each from 760p previously.

It says the group is riding high on news flow and has been a strong outperformer through 2015, delivering more than 5% growth compared to the market and outperforming satellites peers so far.

News has been positive and negative so far, but in all instances the stock continues to march higher, the broker notes, underlining a well-supported stock with holders that have faith in management.

However, it says it would like more comfort around the underlying growth potential and numbers.

Shares are up 1.64% to 928.5p.

 "Betty Power" is born, says broker Exane BNP Paribas today, following news that Paddy Power (LON:PAP) is set to merge with rival Betfair (LON:BET) and upgraded its rating on Betfair to 'neutral' from 'underperform'.

Its rating on Paddy Power is 'neutral'

The broker reckons the deal has logic strategically and would create a "lean" entity with strong cash generation.

"Also, the geographical exposure is largely complementary (Paddy is in Australia, both companies are in Italy). However, they will continue to operate separate brands and are already very cost-lean companies. This limits the amount of synergies they could generate," says analyst Robert Ciaccia.

He has lifted the target on Betfair to £30 from £21 previously.

The analyst says the deal should be finalised by end of this year and it does not expect any headwinds from the CMA.

After the rally in both stocks after announcement, the new company would be trading trading at 18 times EV/EBITA.

"The deal needs a great deal more analysis, but at first sight it looks like the market has already priced in the merger of the two companies."

US broker Jefferies is sweet on sugar giant Tate & Lyle (LON:TATE) today and has upgraded it to 'buy' from 'hold' as it revealed it had turned positive on the company.

The price target is 605p, which is a hefty distance from the current price of 522p.

The 2016 HFCS (High fructose corn syrup) pricing round in the USA has started early and robustly, which is a sign of confidence, it notes.

"With the shares visiting 500p and yielding 5.6%, we turn positive," it said.

Advertising giant WPP (LON:WPP) said yesterday first-half like-for-like net sales rose 2.3% and by 3.7% in July, which the company said indicated potentially stronger third quarter trading.

Pre-tax profit rose 44.5% to £710mln and by 45.6% in constant currencies, reflecting net exceptional gains.

It was upbeat on China despite its downturn, but sounded caution on the UK's EU referendum and the economy.

The firm attracted a good deal of analyst comment on Thursday. Berenberg upgraded shares to 'hold' from 'sell' and lifted the price target to n 1360p from 1325p. Investec move it to 'add' from 'buy, while Japanese broker drops the target to 1675p from 1700p but repeats a 'buy'.

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Thu, 27 Aug 2015 09:49:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/110340/inmarsat-riding-high-on-news-flow-says-nomura-110340.html
<![CDATA[News - Inmarsat to launch third satellite ]]> https://www.proactiveinvestors.co.uk/companies/news/110011/inmarsat-to-launch-third-satellite-110011.html Inmarsat (LON:ISAT) will next week launch the third and final satellite needed to offer the world's first globally available mobile broadband service through a single provider.

The satellite communications provider is launching the I-5 F3 satellite, made by Boeing (NYSE:BA.), at the Baikonur Cosmodrome in Kazakhstan on Friday August 28.

The I-5 F3 will cover the Pacific Ocean region and will work in conjunction with Inmarsat’s other two satellites.

Inmarsat reckons its Global Xpress (GX) programme will offer broadband speeds around 100 times faster than its fourth generation (I-4) constellation.

The group expects to start global commercial GX services by the end of the year.

Chief executive Rupert Pearce said: "The completion of the GX constellation will be a significant milestone for our organisation and is fundamental to the delivery of a new era in mobile satellite communications.”

He added the programme would transform “remote societies that are currently inadequately served by terrestrial networks."

The first GX satellite, Inmarsat-5 F1, was launched in December 2013 and covers Europe, the Middle East, Africa and Asia, while Inmarsat-5 F2, launched in February this year, covers the Americas and the Atlantic Ocean.

Shares have gained 24% so far this year and were 1.5p higher today to 990.5p.

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Mon, 17 Aug 2015 12:00:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/110011/inmarsat-to-launch-third-satellite-110011.html
<![CDATA[News - Inmarsat faces more satellite launch delays ]]> https://www.proactiveinvestors.co.uk/companies/news/106873/inmarsat-faces-more-satellite-launch-delays-106873.html Satellite group Inmarsat (LON:ISAT) warned on profits as it faced more delays on a flagship satellite programme after the burn-up of a rocket designed to take the technology into space.

Inmarsat said the launch of its third Global Xpress satellite would be put back after the failure of a previous launch from a space centre in Kazakhstan involving the Proton Breeze M rocket. Inmarsat expects the delay to slightly affect its 2015 revenue and earnings.

Russian authorities are investigating the cause of the accident in which the rocket carrying a Mexican satellite malfunctioned and burned up over Siberia minutes after launching.

Shares in Inmarsat fell 32p or more than 3% following news of the incident, which chief executive Rupert Pearce said was the third time Global Xpress had faced delays due to Proton launch failures.

He said: "Although in the past, Proton has returned to flight within a few months of a launch failure, it will not be possible to determine the length of the delay in the launch of Inmarsat-5 F3 until the cause of the Centenario launch failure is established.

"Customers are understandably anxious to see the delivery of GX services on a global basis and as soon as we have sufficient information to ascertain the new launch date for I-5 F3, we will make it public."

Inmarsat suspended its guidance of an 8%-12% compound annual growth rate in wholesale mobile satellite service revenue in 2014-16 but said its broader forecast of $500mln of extra revenue from Global Xpress within five years was still in place.

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Mon, 18 May 2015 10:16:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/106873/inmarsat-faces-more-satellite-launch-delays-106873.html
<![CDATA[News - Goldman Sachs says defence spending costs will continue to be a drag on Inmarsat ]]> https://www.proactiveinvestors.co.uk/companies/news/66871/goldman-sachs-says-defence-spending-costs-will-continue-to-be-a-drag-on-inmarsat-78016.html Goldman Sachs expects reductions to US defence spending will continue to be a drag on Inmarsat’s (LON:ISAT) revenues.

The City broker, which today issued a downgrade, added that there are still risks to Inmarsat’s maritime business where take up has been slower and the migration of costs have been higher.

“Given these risks and expensive valuation we expect the shares to underperform,” Goldman analyst Nick Brown.

“We estimate US government revenues declined c.32% year-on-year in 2014 and expect a further 25% decline in 2015 due to continued defence spending reductions and increased competition.”

The broker added that Inmarsat is valued at around a 40% premium to its peers, and it believes the dividend yield supports the stock.

It warns, however, that the dividend is not covered for the next couple of years and it may need to be cut significantly if Inmarsat does not execute its targets.

Goldman repeated a ‘sell’ and 690p price target, which is some 20% below the current price.

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Fri, 06 Mar 2015 14:06:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/66871/goldman-sachs-says-defence-spending-costs-will-continue-to-be-a-drag-on-inmarsat-78016.html
<![CDATA[News - Goldman weighs in with a 'sell' on Inmarsat ]]> https://www.proactiveinvestors.co.uk/companies/news/64736/goldman-weighs-in-with-a-sell-on-inmarsat-75618.html Shares in the satellite communications group Inmarsat (LON:ISAT) were lower in early trade after Goldman Sachs took out the red pen.

Moving directly to ‘sell’ from ‘buy’, the American investment bank expressed worries over the level of US government spending, and the take-up of a new product aimed at the maritime market.

“On our base-case forecasts, the longer-term outlook is attractive, but we expect these risks to drive near-term relative underperformance,” it said in a note to clients.

Goldman’s valuation of Inmarsat was also pegged back – to 690p from 870p previously.

Analyst Nick Brown pointed out at the current price (down 1% at 788p a share) the stock is trading at a 20% premium to its peers in the sector.

He said that the dividend yield of around 4% does add a pillar of support.


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Fri, 19 Dec 2014 08:40:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/64736/goldman-weighs-in-with-a-sell-on-inmarsat-75618.html
<![CDATA[News - Inmarsat's near term trading prospects have deteriorated, says broker ]]> https://www.proactiveinvestors.co.uk/companies/news/53093/inmarsats-near-term-trading-prospects-have-deteriorated-says-broker-63038.html Satellite specialist Inmarsat's (LON:ISAT) near term trading prospects have deteriorated, says Societe General, which rates the shares a 'sell'.

In a recent trading statement,  the UK based firm revealed revenue for the three months to end September fell to $306.9 million from $325.9 million compared to the same period last year due in part to lower demand for its broadband services in Afghanistan.

The broker said Q3 sales had  disappointed on weaker maritime and land data, as well as US government sequestration budget cuts.

Near-term trading prospects for the firm, which provides broadband on boats and land, have deteriorated, it added, with a sharper earnings fall likely in full year 2014.

The broker has cut its sum-of the parts price target for the stock to 650p from 670p previously.

Barclays has also moved the shares to 'equal weight' from 'overweight'.

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Fri, 08 Nov 2013 10:26:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/53093/inmarsats-near-term-trading-prospects-have-deteriorated-says-broker-63038.html
<![CDATA[News - Inmarsat preferred among satellite groups by JP Morgan ]]> https://www.proactiveinvestors.co.uk/companies/news/39609/inmarsat-preferred-among-satellite-groups-by-jp-morgan-47294.html

Broker JP Morgan still likes the satellite business as a sector for investors, with the UK-based Inmarsat (LON:ISAT) its favourite pick.

The broker says demand overall for satellite services is rising and being driven by higher quality transmission needs such as HD, Ultra HD and High Speed Broadband.

The providers are split between fixed satellites services groups (FSS) and mobile satellite service (MSS) providers. JP Morgan says it prefers the MSS side, which it argues has a better revenue growth outlook.

FSS is expected to grow revenues by 3.6 per cent per year for the next 10 years, but MSS revenues should rise by 7 per cent annually over the same period driven by a 13 per cent growth in terminals and the take up of broadband.

This shift to broadband from a previously voice dominated market will provide an incremental up-sell opportunity to higher usage packages for operators that have the capacity.

JPM also expects revenues from government services to be a growing business for the satellite operators as governments will rely more and more on commercial satellite providers to provide their communication needs as they try to save costs.

Inmarsat is preferred for its position in the MSS business says JPM, which expects the company to report accelerating revenue growth paired with declining capex.

Its price target is 700 pence compared to a current share price of 572 pence and its investment stance remains ‘overweight’.

Among the FSS operators, the broker prefers Eutelsat to SES.


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Fri, 24 Aug 2012 11:01:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/39609/inmarsat-preferred-among-satellite-groups-by-jp-morgan-47294.html
<![CDATA[News - Inmarsat shares lifted after core business returns to growth in H1 ]]> https://www.proactiveinvestors.co.uk/companies/news/38836/inmarsat-shares-lifted-after-core-business-returns-to-growth-in-h1-46405.html Shares in Inmarsat (LON:ISAT) rose after the satellite telecommunications group announced that its core mobile satellite services (MSS) business has returned to growth in the first half to June 30 2012.

Inmarsat Global MSS revenue rose 1.4 percent from the previous first half to US$367 million, while total revenue was virtually unchanged at US$684 million.

By 11.10am, the stock had retreated from earlier highs, bust was still trading up 8.5 percent at 525.5 pence.

Chief executive Rupert Pearce said: “Despite a poor macroeconomic environment and a continuing loss of revenue from government users in Afghanistan (during H1), we have made solid progress in returning our Inmarsat Global MSS business to growth. 

Furthermore, the group is seeing sustained take-up and usage growth for its key services, FleetBroadband, IsatPhone Pro, and SwiftBroadband.  

“The outlook statement provided in March 2012 continues to reflect our expectations for the performance of the group and our medium term revenue targets remain unchanged,” the CEO added.

Pretax profit in the first half came to US$223 million, down from US$255 million in the previous first half.

Inmarsat is raising its interim dividend by 10 percent to 16.94 cents a share.

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Fri, 03 Aug 2012 11:12:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/38836/inmarsat-shares-lifted-after-core-business-returns-to-growth-in-h1-46405.html
<![CDATA[News - Inmarsat: Citi downgrades satellite group to 'sell' ]]> https://www.proactiveinvestors.co.uk/companies/news/33700/inmarsat-citi-downgrades-satellite-group-to-sell-40165.html Analysts at Citi have downgraded satellite communications group Inmarsat (LON:ISAT) to 'sell' from 'neutral', saying it saw downside "risks" to consensus estimates in the short term.

Analyst Tania Valiente at the Wall Street bank said she viewed management's upbeat tone following the recent full year results as inconsistent with the approximate 1 per cent decline posted in core MSS (mobile satellite services) revenues last year and the unattractive growth prospects for the next two years.

Citi has reduced its target price on the FTSE 250 stock too - down to 410 pence, from 480 pence previously.

On March 6, the company whose products are used on ships and aircraft, said revenue from satellite services would be flat to up 2 percent this year, against a 0.9 percent decline in 2011.

"We argue the 2013 revenue guidance looks stretched given the continued decline in traditional voice services, lower government spending and intensifying competition in Maritime, combined with a risky price increase strategy," said Valiente.

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Tue, 13 Mar 2012 09:57:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/33700/inmarsat-citi-downgrades-satellite-group-to-sell-40165.html
<![CDATA[News - Inmarsat share sell off “overdone”, says Liberum Capital ]]> https://www.proactiveinvestors.co.uk/companies/news/26439/inmarsat-share-sell-off-overdone-says-liberum-capital-31540.html Today’s sell off of shares in Inmarsat (LON:ISAT) is “overdone” according to Liberum Capital.

At lunchtime today Inmarsat’s shares were down 21 percent at 387 pence each after the company has reduced its 2011 revenue outlook in its core business, although Inmarsat also reported robust results for its first half.

Total revenue for the six months to 30 June was up 20 per cent over H1 2010 at US$692.9 million. Meanwhile, operating profit on the EBITDA level was US$426.9 million – up 28 per cent on H1 2010.

Profit before tax came in at US$254.8 million (H1 2010: US$151.8 million). The company also increased the interim dividend by 10 per cent to 15.4 US cents.

Andrew Sukawaty, Inmarsat’s chairman and chief executive officer, said that income from the firm’s cooperation agreement with wireless broadband Internet provider LightSquared “is driving record revenue and EBITDA growth and offsetting a slowdown in the growth of our Inmarsat Global MSS [mobile satellite communications services] revenue”.

However, Sukawaty added: “While we believe that a return to more normalised revenue growth in our MSS business is only a matter of time, we expect near-term factors will constrain growth for longer than previously anticipated.  As a result, we are revising our outlook for MSS revenue growth for 2011.  In the meantime, given the strong financial position of the company, we have increased our interim dividend and have launched a share repurchase programme."

The reduced in revenue outlook for 2011 in the core business, from up to four per cent growth to flat, should not affect it hitting 2011 pre-tax profit expectations, according to Liberum.

Meanwhile, demand elasticity in the firm’s new FleetBroadband service is taking longer to come through. “We suspect many will treat this with scepticism until the company can actually demonstrate revenues in Maritime can go up rather than down,” added the broker. “Expectations, however, are already pretty low.”

Liberum pointed out that shareholder returns are “still buoyant”, with the interim dividend up 10 per cent and current dividend yield at six per cent. And, added the broker, Q2 group revenues and EBITDA both beat expectations.

“We remain of the view that the current level materially undervalues both the core business... and the US spectrum,” said Liberum. “Soft revenues in the core have undoubtedly disappointed but the company is still posting growth, through the LightSquared arrangements, that many would envy.”

Liberum values Inmarsat’s core business at 700 pence per share.

The response to Inmarsat’s results contrasted sharply with the response to yesterday’s news that smaller rival Avanti Communications (LON:AVN) had signed an additional contract with Hughes Network Systems.

After fully allocating its initial purchase of capacity on Avanti’s HYLAS 1 data communications satellite, Hughes required a new contract for additional satellite beams over and above the original commitment. This is to support new business at Hughes, particularly with its longstanding client Bentley Walker (the satellite Internet provider that is currently installing HYLAS 1 services in the UK and Spain).

Yesterday, Avanti’s share price jumped from 314 pence to 337.25 pence as the market digested the news, although the shares closed lower amid a tough day for the stock market in general.


 

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Thu, 04 Aug 2011 14:03:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/26439/inmarsat-share-sell-off-overdone-says-liberum-capital-31540.html
<![CDATA[News - Inmarsat orders 3 broadband satellites from Boeing ]]> https://www.proactiveinvestors.co.uk/companies/news/16394/inmarsat-orders-3-broadband-satellites-from-boeing--19757.html Through a deal with The Boeing Company (NYSE:BA), Inmarsat (LSE: ISAT) plans to deliver three state-of-the-art 702HP Ka-band satellites - collectively known as the Inmarsat-5 constellation - to provide a global high speed mobile broadband service.

Inmarsat-5 is expected to come online in 2014, and it will support a next generation global service, known as ‘Global Xpress’, which will target a US$1.4bn incremental market opportunity.

Global Xpress will address the established and growing markets for VSAT (Very Small Aperture Terminal) services in the Maritime, Energy and Government sectors. The company sees further growth potential in developing markets such as the Aeronautical sector. 

According to Inmarsat, Global Xpress will deliver “seamless global coverage and unprecedented mobile broadband”, with speeds reaching up to 50MB/s to small customer terminals, from 20-60cm in size.

“With the Global Xpress network, we will be the first operator to offer global mobile broadband coverage, offering unparalleled speeds and bandwidth to customers in remote locations around the world,” Inmarsat chairman & chief executive Andrew Sukawaty said.

“Global Xpress will be faster and less expensive than current Ku-band market offerings, delivered to smaller and cheaper terminals and be the first offered on a seamless, global, end to end basis with high quality of service.”

Inmarsat is targeting US$500m in annual Ka-band revenues within 5 years after global service launch. 

Additionally, under a separate deal, Boeing will become Inmarsat’s distribution partner, for both Inmarsat's Ka- and L-band services, and it has pre-committed to buy capacity representing more than 10% of the targeted Ka-band revenues.

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Fri, 06 Aug 2010 12:00:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/16394/inmarsat-orders-3-broadband-satellites-from-boeing--19757.html
<![CDATA[News - Inmarsat third quarter profits jump 33% ]]> https://www.proactiveinvestors.co.uk/companies/news/721/inmarsat-third-quarter-profits-jump-33-9983.html Inmarsat plc (LSE: ISAT) reported its interim results for the quarter ended 30 September 2009, which underlined continuing growth for the Mobile Satellite Services (MSS) provider. During the period Inmarsat achieved a substantial improvement in both revenues and profitability, with after tax profits rising 33% compared with 2008.


Inmarsat provides global mobile satellite communications, to carry voice and high-speed data services to almost anywhere on the planet. The group has three distinct application divisions land, sea and in the air.


The company has three principle product platforms. The Broadband Global Area Network (BGAN) offers a global voice and high-speed data connectivity to land-based customers, through laptop-sized terminals, while the FleetBroadband and SwiftBroadband platforms deliver this capability to maritime and aeronautical customers.


During the period Inmarsat recorded an 8.7% increase in revenue compared with the same quarter last year, while earnings before tax improved by 18.4%. Subsequently profit after tax was substantially higher, rising 33% to US$50.2m. The FTSE100 constituent also improved its cash position significantly and free cash flow is now 90% higher than last year at $102.9m.


From an operations perspective, all of Inmarsat’s divisions appear to have performed well. Aeronautical revenues grew by 10.1%, driven by sales of ‘SwiftBroadband terminals’ which were particularly strong in the quarter.

SwiftBroadband continues to see orders related to the introduction of in-flight cellular services on commercial airlines. During the period, British Airways (LSE: BAY) adopted the SwiftBroadband service for its flights between London and New York.


Maritime revenues grew by 9.2%, principally driven by data services as the group experienced strong demand for its Fleet and FleetBroadband services.  Land mobile revenue rose 4% - a stronger performance when compared sequentially to the second quarter.


"These third quarter results show that we are continuing to achieve growth in all our MSS markets despite the economic downturn ... we are seeing the benefits of improved terms with our distributors, following the implementation of new agreements in April 2009,” Inmarsat Chairman and CEO Andrew Sukawaty, commented. “We are well positioned to deliver on our targets for the full year."

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Mon, 09 Nov 2009 09:21:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/721/inmarsat-third-quarter-profits-jump-33-9983.html
<![CDATA[News - Inmarsat reports solid first quarter growth in satellite communications business ]]> https://www.proactiveinvestors.co.uk/companies/news/3975/inmarsat-reports-solid-first-quarter-growth-in-satellite-communications-business-5556.html Inmarsat (LSE: ISAT), the global mobile satellite communications services company, reported solid numbers for the first quarter of 2009.


Financial highlights included a 10.5% increase in revenues to US$163.4 million, 13.2% rise in earnings before interest, tax, depreciation and amortisation (‘EBITDA’) to $117.3 million and 35.3% jump in profit after tax of $39.1million.


Andrew Sukawaty, Inmarsat's Chairman and Chief Executive Officer said, “Our first quarter results deliver yet another quarter of strong growth and underline the resilience of our markets thus far to the wider economic climate. In particular, we have been able to sustain growth in maritime revenues despite the challenges facing the global shipping industry.  With these factors in mind, we remain confident in our revenue growth objectives for the full year.”


During the first quarter maritime sector revenue grew 2.3% across voice and data services, land mobile sector revenue was up 10.6%, aeronautical sector revenue grew by 32%, while first quarter leasing revenue was up 40% year over year.


At 31 March 2009, Inmarsat had net borrowings of $970.2m, incorporating borrowings of $1,058.1m and cash of $87.9m.

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Fri, 08 May 2009 09:36:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/3975/inmarsat-reports-solid-first-quarter-growth-in-satellite-communications-business-5556.html