viewBATM Advanced Communications Ltd

BATM sees underlying earnings rise in first half, expects good full-year growth

BATM’s chief executive officer, Zvi Marom said "we expect to report good growth for full year 2019, in line with the Board's expectations”

BATM Advanced Communications Ltd -
For the six months ended 30 June 2019, BATM saw its underlying earnings rise to $3.9mln from $0.5mln a year earlier

BATM Advanced Communications Limited (LON:BVC) has reported an increase in its underlying earnings for the first half of 2019 and expects to record good growth for the full-year as it gains increasing commercial traction in two key areas.

For the six months ended 30 June 2019, the AIM-listed company saw its underlying earnings (EBITDA) rise to US$3.9mln, up from US$0.5mln a year earlier, while it posted an adjusted operating profit of US$1.6mln against a loss of US$0.6mln loss a year earlier.

WATCH: BATM expects good growth for full year 2019 after solid first half performance

The group, a leading provider of real-time technologies for networking solutions and medical laboratory systems, saw its group revenue slip to US$56.2mln, down from US$58.2mln a year earlier, although on a constant currency basis, revenue rose slightly to US$58.4mln.

As at 30 June, the company said it had cash and financial assets of US$16.9mln, a decrease from US$24.4mln as at 31 December 2018 US following investments of US$3.1mln and an increase in working capital

During the first half, BATM successfully raised £14.1mln (around US$17mln) gross from new and existing investors, with the proceeds being received post period-end resulting in cash and financial assets as at 31 July 2019 of US$34.6mln.

Increasing commercial traction

BATM’s chief executive officer, Zvi Marom commented: “We established a strong backlog, with orders from new and existing customers in both divisions, which we expect to deliver in H2 2019 resulting in significant sequential growth. Consequently, we expect to report good growth for full year 2019, in line with the Board's expectations.”

He added: "Looking further ahead, we are gaining increasing commercial traction in two key areas that we believe will secure the success of BATM for many years to come.

“In the Networking and Cyber division, we are making great progress with our NFV strategy that will leverage the transformation brought by 5G that is accelerating worldwide. In the Bio-Medical division, our new molecular biology innovation attracted prominent US-based investors as well as several leading research institutions.

The CEO concluded: “We eagerly anticipate the first NATlab instruments being installed later this year. As a result, we are well-positioned for sustained growth and the Board continues to look to the future with confidence."

In a note to clients, analysts at ‘house’ broker Shore Capital commented “We believe BATM is making rapid progress in its drive to commercialise key technologies, hard to encompass in current financial forecasts.

“Nonetheless, the Group is well financed to drive through accelerating growth leading to future earnings accretion.”

In late morning trading, BATM shares were 2.1% lower at 41.90p, having reversed from an early rise to session high of 44.80p.

 -- Adds broker comment, share price --

Quick facts: BATM Advanced Communications Ltd

Price: 107 GBX

Market: LSE
Market Cap: £471.1 m

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