After a strong second-half performance, BATM Advanced Communications Limited (LON:BVC) expects full-year revenue to be significantly ahead of market expectations.
The provider of real-time technologies for networking solutions and medical laboratory systems expects revenue for 2017 to be around US$106mln, which would represent year-on-year growth of 17%.
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Underlying earnings, or EBITDA, are expected to be around US$7.0mln, up from US$2.8mln in 2017, although the group pointed out that the 2017 EBITDA figure was boosted by roughly US$5.6mln of profits from a property disposal, compared to the preceding year when it pocketed a profit of around US$2.8mln from another property disposal.
The increase in revenue was driven by growth in both of the group's divisions, BATM said.
The Networking & Cyber division generated significantly better-than-expected sales largely due to growth in the group's existing information and communications technology (ICT) services and solutions business as well as its success in implementing its strategy to leverage the telecom industry transition from hardware to network function virtualisation (NFV) and software-defined networking (SDN).
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Revenue growth in the Bio-Medical division was driven by stronger sales in the distribution unit, mostly based on diagnostic and molecular biology products and services.
“The importance of this update, in our view, is what it implies for the trading performance going into the current year, in particular higher revenues from recent published contract success across the group with positive operating leverage beginning to come through,” said Shore Capital, the company’s house broker.
The broker has upgraded its expectations for 2018 accordingly, noting that “investors will welcome this significant trading improvement after the last few years of strategic development from BATM”.
It has bumped up its revenue forecast by 9% to US$110mln while its underlying earnings (EBTIDA) estimate has been increased from US$2.8mln to US$3.9mln – an increase of 39%.
Adjusted earnings per share are now forecast to be 0.25 cents versus 0.07 cents previously.
“With BATM’s intellectual property set configured to tackle real world challenges in its specialist markets, we believe that the scope for further revenue and profit improvement is significant,” the broker said.
Shares in BATM were up 8.2% at 26.5p on Monday morning.