Inmarsat Share Discussion Threads

[kamitora] 13/12/2017 05:20

Satellite ‎group Avanti takes flight with $550m debt overhaul

"The provider of satellite broadband services will unveil plans for the debt-for-equity swap on Wednesday, Sky News learns."

[w1ndjammer] 12/12/2017 16:39

How many of the following burdening tasks are familiar to government users? And, what is the value of cost and schedule risk that is accepted as a result?

Months of contracting activity and complex acquisition processes;
Pre-planning that requires days or months of approval time;
Week-long training courses for operators and maintainers;
Complex logistics tails for shipping large transit cases and for spare parts to support high-failure items, and innumerable LRUs (Lowest Replaceable Units);
End-to-end architecture engineering and testing;
Complex configuration files that must be created for each use, and sent to the operator;
Hours of antenna and terminal assembly;
Hours of satellite acquisition;
Troubleshooting the gateway, the fiber, the modem, the routers.
Reliable worldwide connectivity
There is an answer to this problem: none of these issues exist for customers using Inmarsat services.

Users familiar with Inmarsat’s solutions understand the difference between a network designed for reliable worldwide connectivity and one that is a legacy patchwork VSAT system. They have recognized the benefits to Total Cost of Ownership (TCO) when leveraging a worldwide service designed from end to end by a single satellite operator, and delivered by a world-class ecosystem of experienced partners.

[w1ndjammer] 12/12/2017 16:06

al 101

a balanced view thanks for spending your time.

WJ.

[al101uk] 12/12/2017 15:09

I can't find any coverage of the current Numis note that offers any clues, but they only initiated coverage recently at 480p (before the downgrade) and there is some detail in the press coverage of that.

"Numis, which initiated coverage with a target price of 480p, did not contest management's view that demand for satellite connectivity will keep rising apace for years to come, but caution about the company's outlook was heightened given its current share price."

This seems to chime with every other analyst out there, that growth is likely in the medium term.

Maritime (48%)

"Revenue growth could be much less than the consensus 2.5% in the current and 4.4% in the subsequent year."

They got this one right, looks like revenue growth is likely positive given the sequential growth quarter on quarter, but it's pretty flat by Q3 year on year, so likely will miss the 2.5% by a margin.

Government (28%)

"As for government sales Numis think 'business with Boeing may not be growing fast enough to make up for ebbing take-or-pay revenue'.
Government margins may not have been as strong as management commentary implied."

Government margins seem pretty flat as of the end of the 3rd quarter, with revenue looking stronger by 4% which seems to be beat to me.

Enterprise (12%)

"In enterprise Inmarsat has lost its strategic take-or-pay partner."

Expected decline in revenue as predicted by management came to pass, although there has been the start of growth in the third quarter, we'll call this one a draw.

Aviation (12%)

"Price and service competition remain very intense and analysts think the group 'may now be less bullish about prospects of its flagship Lufthansa contract'."

This doesn't seem to have been backed up in the 3rd quarter statement:

"Aviation revenues were particularly strong, supported by the continued expansion of our contracted aircraft order book in in-flight connectivity (“IFC”)."

Capital Expenditure

"Capital expenditure is likely to surge 10-20% more than most analysts expects"

Seems to be as per guidance to me, not sure why "most analysts" would not use the guided numbers.

Forecast:

By the 2019 financial year, Numis forecasts for EBITDA 8% lower than consensus, with a flat dividend.

A conclusion, to me that doesn't warrant a 480p target price (let alone 400p), no projected dividend cut, an admission that growth is likely in the medium term and a short term decline in EBITDA while the company is refreshing it's inventory. I strongly suspect that the Discounted Cash Flow didn't project out beyond 5 years and as a result didn't fully reflect the future growth in the company. For the most negative view of the companies prospects I don't see anything particularly scary.

[penycae] 12/12/2017 14:44

badger60 - you lost £850 here. Would you be offended if I asked you whether you held the paper, or were you using spread bets or cfd's? You have said that you are ruthless when it comes to cutting losses. Did you have a big position with a modest stop?
£850 looks a smallish amount when compared to your other gains. I'm wondering what caused you to sell up without giving your position a little more time to develop. This is clearly a bear raid. It's unlikely that the company will go under. You seem to favour Numis over the other brokerages, most of which are quite respectable and well informed.
I'm not looking for confrontation here, these are genuine questions. I have quite a few of these. I'm more than £850 underwater, but I've been in these situations before (mostly involving AQR). I've made a lot of money out of short squeezes, and I think there's one coming right up.

[badger60] 12/12/2017 13:31

Good luck...and I hope that you are right.

[zcaprd7] 12/12/2017 13:19

I understand your position, but this mispricing by the market is why I'm happy to load up in my sipp on every dip......I could be wrong, and each lurch down brings out more "no smoke without fire" comments, but I am happy to build a stake.By all means turn a quick profit on the short side, but I think that ship has sailed, and this can move up quickly on any positive news.

[badger60] 12/12/2017 13:03

zcaprd7I know very little about the satellite telecoms industry, but I do know a bit about finance, having worked in investment banking for some time. I totally agree with you that brokers are clueless about many of the finer details of the industries that they evaluate, and in this particular case have shown themselves to be totally inept apart from Numis.Unfortunately, regardless of their arguable product leadership etc., the figures don't stack up. Inmarsat are crossing lines which sound off very loud financial alarms......the worst of which, imo, is reflected in their inability to cover dividend payments without taking on debt, although I know that you disagree, but hence the very bearish effect which is expressed in the share price While the management may have been good on the product development side, they have been absolutely abysmal in managing their finances, which is fundamental to any business regardless (unless you are a part of the unaccountable establishment with bottomless tax payer funds at your disposal).I don't fall in love with my investments and I'm ruthless in cutting my losses, as I posted here last week. The financial fundamentals are here very rocky which severely compromises the companies ability to be profitable going forward, imo., in a very competitive market which needs substantial resources and astute management to be successful.......and unfortunately imo Inmarsat no longer has either........

[wad collector] 12/12/2017 11:39

I remain as puzzled as most here I suspect as to whether this is a screaming buy or another lemon going down the pan like most of my recent buys...
I hold quite a few , sitting on a large paper loss , but can't quite bring myself to buy more at this bargain price. I shall sit and hold...

[w1ndjammer] 12/12/2017 10:43

Yesterdays news todays chip paper......

WJ.

[steeplejack] 12/12/2017 10:38

Yesterday's NewsGoldman Sachs has downgraded its stance on Inmarsat to 'neutral' from 'buy' and slashed the price target to 580p from 860p.It noted that since being added to the Buy List in August 2016, the stock is down around 43% versus the FTSE World Europe up around 15%, driven by earnings downgrades as aero costs increased and revenue headwinds persisted.The bank pointed out that Inmarsat is facing higher costs associated with building out its inflight connectivity business - now 1300 planes contracted - limited recovery in maritime and legacy declines."We continue to view the stock as a longer-term growth story given its exposure to growing segments in the satellite industry (aero, government and maritime)."However, with capex remaining elevated through to 2020E as ISAT refreshes its satellite fleet, we expect limited free cash flow generation to continue to leave the dividend uncovered."

[al101uk] 12/12/2017 10:17

zcaprd7,

That's exactly as I read the situation, although I'm split on whether brokers are just unable to build a model that truly reflects the business (given Q3 Q&A they obviously struggle) or if it's just down to the short sighted nature of investment. On a 12 to 18 month basis you can see why this would be marked down.

[zcaprd7] 12/12/2017 09:59

Yes, badger, I do have things to say, please bother to scroll back and read my earlier comments, before you jumped in with your bear angle. In a nutshell, having worked in the industry, I don't believe the brokers truly understand the satellite capex cycle, and price it up like they're selling widgets (or its an asset like a house). It's a costly business on the front end, and they are at the peak spend. This all falls away as the additional throughput and revenue fall to the bottom line for 15 years of the satellite life. This explains why they are happy to pay future dividends now, out of debt...

[wskill] 12/12/2017 09:04

Just managed a top up it has taken me 30 mins to get an online quote ,so much for the shorts selling all these small orders.

[ddubzy] 12/12/2017 08:58

Nice couple of posts Kamitora, thank you for providing some valuable info on this board.

[w1ndjammer] 12/12/2017 07:50

12 December 2017 - 14 December 2017
DoD Commercial SATCOM Workshop
The DoD Commercial SATCOM Workshop brings together government leaders from DoD Combatant Commands, Services and Agencies as well as commercial satellite industry operators, service providers, integrators, ground equipment suppliers, and manufacturers.

Inmarsat U.S. Government Business Unit is a proud sponsor of this important event, organised by the Satellite Industry Association (SIA), and will join government decision-makers, participants and speakers in Arlington, Virginia, USA for three days of discussion and displays of the latest satellite-based solutions.

Rebecca Cowen-Hirsch, Inmarsat’s U.S. Government Business Unit Senior Vice President of Government Strategy and Policy, will moderate the Business Models and the Future of Integrated SATCOM panel on 13 December 2017 from 1:45 – 3:15 p.m. EST at the Hyatt Regency Crystal City in Arlington, VA.

Ongoing challenges
This session will bring together government and industry representatives to discuss the need to seamlessly integrate relevant commercial satellite communication (COMSATCOM) models into baseline government architectures. It will also highlight the ongoing challenges facing agencies, such as overstretched budgets and constrained military satellite communication (MILSATCOM) access.

In addition, panelists will share their perspectives on how expanding COMSATCOM integration would improve operational flexibility and enhance the industry’s relationship with the government, elevating it to a fully realized partnership.

For more information on the panel, access the event’s website: www.dodsatcom.com.

[kamitora] 12/12/2017 06:39

SoftBank to Invest Around $500 Million More in OneWeb Satellite-Internet Venture

[davemac3] 11/12/2017 22:43

All a bit childish

[zcaprd7] 11/12/2017 22:11

Oh dear, this thread has gone pear shaped, anyone here actually worked in satcoms?