Batm Advanced Communicat... Share Discussion Threads

[countryboy] 19/3/2018 16:58

Thanks spekky. Now lets see how high the breakout takes it. Rising volume over last few days also.

[spekky] 19/3/2018 16:52

Countryboy......good call.

[red5] 18/3/2018 13:13

I am thinking of getting into these after reading about them in IC, I remember BATM during the Dot Com bubble made £25,000 on £500.00 investment and had to cash in needed to buy house, which turned out to be very fortunate as it all started to go pair shaped a couple of months later, so is it a good buy?

[fse] 12/3/2018 14:31

Holding them back is the "fact" that their house broker Shore Capital have a current brokers note out there which states that they are expecting revenue growth of just under 3% for 2018, which is 15% less than last years growth.
Shore Capital do not reply to e mails, I even tried calling them and the writer of the report had gone on vacation.
Strongly suggest investors holding shares should ask Shore for an explanation.
This is why aol, motley fool and others have it as a sell.
The figures are inaccurate but they are out there.
Glad to hear IC put in a good review any numbers with it ?

Added: Due to the inaccurate Shore Capital report it does give a buying op. ;-)

[countryboy] 12/3/2018 13:46

Chart drawing a flag with an upwards breakout suggested soon.

[phda] 12/3/2018 13:03

Needs to break through 27p which was a resistance level on the last rise up. Hopefully we can get into the 30s soon.

[pastybap] 12/3/2018 12:19

"Strong buy" tip update by Simon Thompson in the IC.

[volsung] 12/3/2018 12:17

Summat seems to be happening here. Funny I was considering having a wee top-up this morning.

[fse] 08/3/2018 23:05

>JD..... Yes it looks a lot more streamlined and up to scratch (or will be)
They doubtless designed that in house.

Not sure what you make out of Shore Capital note. That very recent note is cropping up all over the place and thats what why analysts are either lukewarm or sellers of BATM.
I dropped Shore an email but they don't reply.
Its not going to make much difference long term but certainly causing some consternation currently with investors.

Shore Capital Head of research is Clive Black. [phone]
I would call him and ask for an explanation but I am not in the UK and in a different time zone so maybe someone reading this who is in the UK can just ask him to check their figures.

Update: Spoke to Shore Capital and the Guy that made the report is off on vacation.
I could comment further but not in polite company.

[james dean] 08/3/2018 20:44

FSE -

If you check now, you will find the website has been replaced with a new one.

JD

[fse] 08/3/2018 20:15

new website




"We are growing exponentially with new office sites being set up globally.
Just fill out this form with your message and we will get back to you."

[zipstuck] 07/3/2018 17:24

The key is the substantial accrual of orders for 2018 in the bio med division which bodes well for an overall increase in profitability.

[reeltime] 07/3/2018 16:44

FSE

Thanks for your posts and feedback, I'll look forward to the response of your emails from both Shore Capital and BATM.

I agree with your findings regards the figures (somewhat confusing) it would appear from the results the problem for the Diagnostics unit lies with the Key Chinese market, so what's gone wrong?
"Increased penetration and geographical expansion with existing products, but overall revenue lower compared with prior year due to reduced sales in China, a key market"

[fse] 07/3/2018 15:35

I have dropped an e mail to Shore Capital and BATM asking for some explanation for their brokers 2018 revenue estimates which imply a less than 3% growth rate for 2018.
The article JD kindly posted above uses Shore figures which are essentially whats out there in the Public domain.
Remember that Marrom is a director at Shore Capital.

[fse] 06/3/2018 22:20

Heres what Shore Capital had to say which might explain some of the confusion. The figures don't add up. If you bumped the revenue UP by 9% over your original estimate then 2017 revenue of $107 M plus 9% then that comes to $120M plus whatever they had assumed it would go up by.
The article has taken its figures from Shore Capital who can either not add or should explain their estimate.
Assuming their bullish stance and BATM continue on the same way in 2018 they are going to post 2018 year end revenue at minimum 126M.

Strong finish to 2017 bodes well for current trading

“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.

[fse] 06/3/2018 21:42

Thanks for posting that JD. Not what most of us want to hear but its a point and its why the share price its where its at. The real estate disposal does need to be stripped out of the equation although its not simply a matter of deducting the Sales price from the profit.

The article states that "analysts" expect growth of 4% and an increase in operating costs. Not sure what analysts these are and BATM started turning the corner in 2015 with year on year increase since of 11% then 18.5%.
House broker Shore stated something along the lines that they would build significantly on previous years position.

Overall The medical division has gone from a HOLD to a SELL and the Telco has gone from an optimists HOLD to a more solid BUY. Ergo I am not topping up at the moment but Holding ;-)

The value of BATM current IP held due to extensive long tern R&D is not in the value because we just don't know what its worth. ?????????

Article also is also from the point of view of those who bought in at @18p and sitting on @26p. Still article worth a read and thumbs up for posting it not for what it says !

[fse] 06/3/2018 19:20

Diagnostic Units:

Last year Egens Biotech took a 5% position in Adaltis valuing the company at $58M
This partnership was supposed to boost Sales in the FE China region.
Instead we have had a collapse in sales of Diagnostic units.
I can accept that partnerships do not yield instant results but should not precipitate a drop.
BATM medical arm did announce in the 2017 results that they had released a new Elisa instrument called "Personal Lab" a link is below.



The problem here is that the Distribution Unit which makes money from reagents sold for use in the Diagnostic units will not continue to push ahead if the Diagnostic Unit sales falter.

Management assure investors that they are making up the gap by expanding into new markets and that their order book is higher than last year at this time.
Adaltis was doing perfectly well prior to the 5% Sale to Egens so the trouble I am having is why would the situation deteriorate after the sale.

It could be that they don't have the Diagnostic Units to sell due to manufacturing issues or change in specifications. This and the supply of reagents has been a problem in the past.
I am not unhappy about the results in general but this really is an issue that needs a better explanation.

Egens have the products on their website

[brucie5] 06/3/2018 10:29

Trying to break out, and my assumption has been that it will. I doubled up here a about a month ago on the basis of the chart, and today's results seem positive. This is a new historical range of the share and a surge over 30p would bring it to attention of momentum investors, who are clearly reluctant to give benefit until they see this multiple top go..

I'm very happy hold.

[fse] 05/3/2018 16:06

Looking over these results more in depth. Overall encouraging but there are a lot of red flags here and problem areas.
Will comment later.

[reeltime] 05/3/2018 10:10

BATM Advanced Communications lays groundwork for strong growth in 2018

Video interview

[james dean] 05/3/2018 08:17

.

Operational Review

This was a turnaround year for BATM as the Networking and Cyber division achieved increased year-on-year revenue for the first time since 2011 and the Bio-Medical division continued to demonstrate strong growth. The strategy that the Group had implemented in the Bio-Medical division to establish the Eco-Med unit also began to come to fruition with its newly-launched solutions gaining significant traction during the period and an accrual of a substantial order book for delivery in 2018.

Both divisions gained new customers, secured new contracts and expanded into new territories. New products and technologies have replaced legacy products, and the Group advanced its sales and marketing strategies in targeting new areas that the Group had identified as growth markets.

As a result, total Group revenue increased by 18.5% to $107.1m (2016: $90.4m), of which the Bio-Medical division accounted for 54% with the contribution from the Networking and Cyber division being 46%. The Group also increased its operating profit and returned to generating positive earnings per share.

Bio-Medical Division

H1 2017 H2 2017 FY 2017 FY 2016
-------------------- -------- --------- -------- --------
Revenues $28.6m $28.8m $57.4m $51.6m
-------------------- -------- --------- -------- --------
Gross margin 25% 25% 25% 25%
-------------------- -------- --------- -------- --------
Adjusted operating
loss $(0.3m) $ (0.8m) $(1.1m) $(0.3m)
-------------------- -------- --------- -------- --------


The Bio-Medical division achieved significant revenue growth in the Eco-Med and Distribution units, which offset the lower revenues in the Diagnostics unit. However, as a result of the latter, adjusted operating loss for the division was greater than the prior year.

Distribution

The Distribution unit accounted for 74% of the Bio-Medical division's revenues in 2017 compared with 68% of revenues in 2016, reflecting an increase in sales of 21.3%. This was due to strong growth in the distribution of diagnostic kits and services.

At the beginning of the year, the Group acquired the entire issued share capital of Zer Laboratories for a consideration of NIS 2.75m (c. GBP580,000) payable in cash. Zer Laboratories is the largest private diagnostic laboratory in Israel for clinical tests, mainly providing prenatal screening tests for Down's syndrome, genetic tests and additional non-invasive prenatal tests (NIPT) performed during IVF and fertility treatments. During the year, BATM commenced providing these tests and achieved strong, better-than-expected sales. Towards the end of the year, new molecular biology tests, especially for cancer, were added in cooperation with leading US companies. These tests have received a very good initial response with first sales from several prominent oncologists.

Also during the year, operations commenced at the two new diagnostic and analytic laboratories that the Group opened in Romania in 2016.

Eco-Med

The Eco-Med unit accounted for 13% of the Bio-Medical division's revenues in 2017 compared with 11% of revenues in 2016, reflecting an increase in revenues of 29.3%. This growth is primarily due to sales of the Group's new, larger solutions, based on its unique patented Integrated Shredder and Steriliser ("ISS") technology, developed for treating biological waste in the biopharma and agri-business sectors. The unit is also leveraging its ISS technology to apply to other industries where the solutions have a higher value and greater market potential.

The unit achieved a significant improvement in gross margin to 23.2% (2016: 12.7%) as a result of sales of higher margin agri-waste solutions.

During the year, the Group launched the world's first mobile agri-waste treatment solution and was awarded a contract of $2.5m, subsequently extended by $1.1m for a fixed unit. The delivery of the mobile unit has now been completed.

The first large installation of the Group's new solution for treating agricultural waste, which was installed in 2016 at a processing facility of a major poultry farming company, continued to perform very successfully. The Group is also in the process of providing a second unit at a bovine slaughterhouse facility for the largest and leading food group in Israel, which follows the successful installation and operation of an initial unit in 2016.

The Group commenced sales of the new ISS 500 that has been adapted for the disposal of medical waste in hospitals. The product is receiving a lot of interest from hospitals because of its automated reloading system, which reduces human exposure to medical waste. During the period, the first systems were delivered to customers in the Middle East and Europe and the first orders for the new solution were received from the US.

Diagnostics

The Diagnostics unit represented 13% of Bio-Medical division revenues in 2017 compared with 20% during 2016 reflecting a decrease in revenues to $7.4m (2016: $10.2m). This reduction was primarily due to weakness in China. However, the Group expanded the geographic sales reach to increase market penetration of its existing products, resulting in the unit entering 2018 with a higher order book than at the same point in the prior year.

The Group continued to develop its new products for the diagnostics market. In December, the Group launched a new ELISA instrument, called Personal LAB, with several orders received to date. Progress also continued to be made by the Group's joint venture company, Ador, established in December 2015 with Gamida for Life group, in its preparations for the production and marketing of a unique rapid-results sample-to-answer multiplexed molecular diagnostics system - that has already been granted several patents in the US - and a selection of reagent kits.

In July 2017, the Group appointed Dr. David Perry MD as Chief Executive Officer of Adaltis, whose previous experience includes VP Global Clinical and Medical Affairs at Baxter Bioscience. The new role was created within Adaltis as it begins to gear up to take advantage of the advances within its molecular biology business unit, as well as the growing in-vitro diagnostics field. In particular, BATM intends to use the Zer Laboratories acquisition - in addition to distributing diagnostic tests of Abbot and other third parties - for launching new, advanced diagnostic DNA-based tests and molecular biology solutions developed by Adaltis.

Networking and Cyber Division

H1 2017 H2 2017 FY 2017 FY 2016
-------------------- -------- -------- -------- --------
Revenues $21.0m $28.4m $49.4m $38.5m
-------------------- -------- -------- -------- --------
Gross margin 37% 36% 36% 40%
-------------------- -------- -------- -------- --------
Adjusted operating
profit (loss) $(0.4m) $1.3m $0.9m $(2.2m)
-------------------- -------- -------- -------- --------


This was a milestone year for the Networking and Cyber division as the significant level of investment in prior years has driven a return to growth. Revenue increased by $10.9m to $49.4m (2016: $38.5m) for 2017, which was largely due to growth in the ICT services and solutions business as well as the Group's success in implementing its strategy to leverage the telecom industry transition from hardware to Network Function Virtualisation and Software-Defined Networking. The Group achieved an adjusted operating profit for the Networking and Cyber division of $0.9m in 2017 compared with a loss of $2.2m for the prior year. Gross profit margin for the division reduced to 36% (2016: 40%) due to the contribution to revenues from a large government contract that carried a lower gross margin.

ICT solutions and services

During the year, ICT services and solutions gained 47 new client accounts in North America, including blue-chip companies such as Google, TPx Communications, Union Wireless and Alpine Communications. As a result, the Group shipped 27% more systems in 2017 in the US compared with the prior year. In particular, a Tier 1 cyber security customer launched its new security systems that contain the Group's latest ATCA product 100GE card. The new ATCA 100GE is gaining increasing momentum and interest from various customers. In addition, the 100GE card is playing a key role in the new aggregation platform, T-Metro 8100 - a next-generation, high-density, standalone 100GE services aggregation platform that was released in H2 2017.

Also during the year, NGSoft, a high-end software development and design business and subsidiary within the Networking and Cyber division, was awarded a framework agreement, valued at up to $35.8m over five years, to provide ICT services and solutions to an agency of a government defence department. The Group has received $8.6m in orders under the agreement to date.

SDN/NFV solutions

The Group made significant progress in advancing its SDN/NFV offer. It established partnerships with a number of leading telecoms organisations, with the respective partners offering joint solutions for network virtualisation. The partnerships include leading providers of central processing unit technology, white box hardware and across a range of virtual network functions. This included a collaboration with NXP Semiconductors (NASDAQ: NXPI) and Arm Holdings to develop a NFV solution that enabled the first virtualised operating system to support Arm architecture as well as all Intel architecture. The Group is the only worldwide software vendor to provide NFV functionality to Arm architecture and all Intel platforms.

The Group's open and agile service delivery platform can meet the growing demand from telecoms operators and managed service providers for solutions that offer increased performance, flexibility and cost savings on their networks, regardless of their hardware or what they may choose to use. During the year, the Group conducted several successful POCs worldwide, which it expects to translate into significant orders during 2018.

Cyber

BATM also continued to grow its cyber security business. The Group received an expansion to a contract that was originally awarded in 2016 for the supply of an ICT solution combined with several cyber elements to a government defence department, which increased in value to $5.2m. The Group engaged in several POCs in multiple countries, including conducting a successful POC for cyber monitoring and detection systems for a European government customer, the first such European government customer for the Group's cyber solutions.

Post period end, the Group was awarded a significant contract to supply a cyber communication technology solution to a government defence department, which is worth approximately $4m in 2018. This contract is the fourth such contract awarded to BATM by a national government and followed a successful deployment of the division's solution previously. BATM expects to commence delivery of the contract in Q2 2018 with completion by year-end, and anticipates receiving follow-on orders after the completion of this contract.

Financial Review

Total Group revenue for 2017 increased by 18.5% to $107.1m (2016: $90.4m) reflecting growth in both divisions: 11% increase in revenue in the Bio-Medical division, which contributed 54% of total sales, and 28% increase in the Networking and Cyber division, which contributed 46% of total sales. As mentioned above, the increase in revenue in the Networking and Cyber division was due to growth in the Group's existing ICT services and solutions business as well as its success in implementing its SDN/NFV strategy. The Bio-Medical division growth was due to an increase in sales in the Distribution and the Eco-Med units, which more than offset lower sales in the Diagnostics unit.

The blended gross profit margin for the year was 30.6% (2016: 31.4%). This decrease is mostly due to a reduction in the gross margin of the Networking and Cyber division as a result of the contribution to revenue from a large government contract that carried a lower margin.

Sales and marketing expenses were $15.0m (2016: $14.3m), representing 14% of revenues compared with 16% in 2016.

General and administrative expenses were $10.3m (2016: $9.6m), representing 10% of revenues compared with 11% in 2016.

R&D investment in 2017 was $7.8m (2016: $7.6m).

Adjusted operating profit increased significantly to $5.6m (2016: $0.9m). This was due to both stronger trading and the capital gain from the selling one of the Group's buildings as announced on 4 December 2017. On an underlying basis, excluding the capital gain from property, plant and equipment of $5.5m (2016: $3.1m), the Group delivered an adjusted operating profit of $0.1m compared with an adjusted operating loss of $2.2m in 2016, which also excludes the capital gain from property, plant and equipment in the prior year.

EBITDA increased 175% to $7.7m in 2017 (2016: $2.8m). Excluding the benefit of profits on the disposal of property, plant and equipment, EBITDA was $2.2m in 2017 compared with a loss in 2016 of $0.3m.

As a result, the Group achieved earnings per share of 0.06c (2016: 0.27c loss per share), which is the first time that the Group has reported positive earnings per share since 2012.

The Group's balance sheet remains strong with effective liquidity of $24.0m at 31 December 2017 compared with $22.4m at 30 June 2017 and $27.6m at 31 December 2016. In H1 2018, the Group is due to receive a further $5.8m as the final payment from the sale of the building noted above. Period-end cash is comprised as follows: cash and deposits up to three months duration of $18.2m and short-term cash deposits up to one year and held-for-trading bonds of $5.8m. The decrease in cash balances compared with the same period the prior year is mainly as a result of the acquisition of Zer Laboratories, and investment in the development of the Diagnostic unit's Ador joint venture and the Adaltis Bio Med associated company.

Inventory was $23.2m (31 December 2016: $20.5m). The increase is mostly due to currency fluctuations of $2.1m and an increase in inventory in the Diagnostic unit to satisfy the increased order book for delivery in 2018. Trade and other receivables increased to $46.9m (31 December 2016: $28.1m), mostly due to an increase in trade receivables from the selling of the building at the end of the year as well as an increase in trade receivables in the Networking and Cyber division due to strong sales towards the end of the year. Post year end, the trade receivables position has been reduced as the customers have paid.

Intangible assets and goodwill were $22.9m (31 December 2016: $20.6m), with the increase mostly due to the acquisition of Zer Laboratories.

Property, plant and equipment and investment property decreased to $16.7m (31 December 2016: $17.7m). The decrease is primarily due to the disposal of one of the Group's properties in the year.

The balance of trade and other payables was $39.8m (31 December 2016: $27.1m). The increase is mostly due to an increase in trade payables in the Networking and Cyber division as well as an increase in government taxes due to tax on the capital gain from the selling of the Group's building.

Cash inflow from operating activities was $0.1m for 2017 compared with an inflow of $0.9m for the prior year due to an increase in working capital and increase in tax payments.

Outlook

The Group entered 2018 in a stronger position than at the same point in the prior year with a higher order book in all of its units, particularly in the Networking and Cyber division and the Eco-Med unit. Both divisions are receiving increasing demand for their newly-launched products and solutions, with the Networking and Cyber division having conducted multiple POCs for its SDN/NFV and cyber solutions that it expects to translate to significant orders in 2018.

The Diagnostics unit of the Bio-Medical division is making significant advancements in the development and introduction of its new molecular-diagnostics instruments, which it expects to launch in 2018. It is also experiencing a return to growth in sales for its existing analytics equipment and reagents as a result of geographic expansion of its sales and marketing efforts. In addition, the Group expects to be able to leverage the Zer Laboratories acquisition in offering its own diagnostic tests.

As a result, the Group expects to report year-on-year revenue growth for full year 2018, and the Board remains highly confident in the outlook for the Group and delivering shareholder value.

BATM ADVANCED COMMUNICATIONS LTD.

[molatovkid] 05/3/2018 07:29

I'll take those results !

[fse] 26/2/2018 15:23

Heres the Blog from Marvell re the cooperative venture.



Telco blog