Inmarsat Share Discussion Threads

[rogerrail] 09/3/2018 13:07

They have over-egged the divi cut, should have gone to 25 cents to support the current share price with an approx 4% yield. I can see this drifting down after today as high yield income funds sell.

[silver tortoise] 09/3/2018 12:39

I have to,will just see how this pans out.

[losos] 09/3/2018 12:34

steplejack - "There are of course many precedents here.Aviva cut its dividend by some 43 per cent between 2012-2014 from 26p to only 15p,progressively growing the dividend thereafter as things improved."

Yes, I remember that AV. cut haha. As it happens only yesterday they announced an 18% increase in the dividend. I hold both AV. & ISAT. I'm underwater on ISAT but in 2 or 3 years I still believe the capex they are doing now will pay. That's a long time for the traders amongst us, think I might just put my ISAT file in the loft and forget about it haha.

[al101uk] 09/3/2018 11:41

Dupe of Speeplejacks post... he beat me to it.

[steeplejack] 09/3/2018 11:40

Alphaville comment today

Citi Take .. Inmarsat reported 4Q EBITDA (ex Ligado) of $151.5m, 3.1% ahead of company consensus, driven by strong Aviation and Government margins partly offset by misses at Maritime and Enterprise. Revenue of $321.6m (ex Ligado) was 2.0% ahead of consensus, but declined 1.2% yoy partly due to positive one-off at Government segment last year. The annual dividend from 2018 is being cut by around two-thirds, saving c.$150m pa post the scrip option (assuming the 14% scrip uptake at the interim). Otherwise, the outlook commentary looks broadly in line with consensus. We think the dividend change was largely anticipated by the market.

Implications — This was a solid enough set of results compared to expectations, with better growth at Maritime, VSAT adds not too far off the 3Q pace, and Aviation margin well ahead of expectations. The rebasing of the dividend to 20 cents, flat until FCF recovers sufficiently, should have dealt decisively with that overhang


And Morgan Stanley.

Revenue, excluding Ligado, unchanged at $1,300m to $1,500m. This compares to MS at MS $1,361mn and Cons $1,343mn. However, the comments around the Government division are cautious (headwinds persisting, Boeing contract going back to normalised levels, no repeat of exceptional revenues, lumpy), which suggests that consensus 2019 expectations of 5% revenue growth could be too high. There is also a new comment saying that management target “mid-single221; digit revenue growth on average over the next 5 years. Consensus is for +8% in 2019.

[ncnd] 09/3/2018 11:31

Interesting to see if Credit Suisse rerate ISAT following their Q&A today from their original £8:10 forecast in November 2017.

It appears all the bad news is out regarding share price, contracts not yet signed off and the awaiting of FCC approval regarding Ligado, which is a US satellite company that uses Inmarsat's spectrum, would pause in 2019 and resume in 2020 at around $136m a year. Ligado is currently waiting for a government licence.

If licence is granted (lets hope) then no pause in 2019.

[bluemango] 09/3/2018 11:09

They've lanced the boil and having chosen to cut the dividend there was no point in half measures. If you're going to take an unpopular step, at least maximise the benefit to the business, so I've got no issue with the level of re-based dividend.

[steeplejack] 09/3/2018 10:55

There are of course many precedents here.Aviva cut its dividend by some 43 per cent between 2012-2014 from 26p to only 15p,progressively growing the dividend thereafter as things improved.As ever,it comes down to whether you believe in the inflight broadband story and have confidence in the ability of the management to exploit the opportunity.That said,mulling over the dividend cut (which I expected)the size of the cut to only 20 cents is pretty draconian.

[wad collector] 09/3/2018 10:09

It might be time to rename this header. No longer a new issue , a bit profitable , and a reasonable yield. The yield might have risen further by the end of the day!
Another of my lemons.....

[steeplejack] 09/3/2018 09:40

It is as if this company has had a damascene experience.All of a sudden the dividend is cut by two thirds.Given statements made at the interim,the magnitude of the cut is very surprising.Yet,as mentioned,a company operating in high tech isn't ordinarily to be found offering a well above average yield.I look forward to FTAlphaville comments at 11 o clock.

[raffles the gentleman thug] 09/3/2018 09:27

The attraction is most definitely in the debt/equity value transference when free cash flows resume in 2018 and beyond coupled with expansion in EV based multiples which should underpin really quite good equity price performance from here on in

[aleman] 09/3/2018 09:25

Less than 4 x EBITDA is cheap. The company has cut the dividend so it can manage the debt and potential Ligado loss through a high capex period. The rating should recover if nothing else comes out of the woodwork and possibly rise a bit more if we see some growth come through.

[andyj] 09/3/2018 09:18

Now we know why these have been falling since August. These results suggest a business with modest growth and an unattractive yield, much of which is priced in. Yet I see little reason for buyers to push the price higher.

[zcaprd7] 09/3/2018 09:16

Who cares if they pay a dividend?

[aleman] 09/3/2018 09:16

So the company has switched spin as a it set it's stall to manage without Ligado. We've gone from an optimistic outlook which Ligado might detract from, to a pessimistic outlook which Ligado might add to. If Ligado continues to pay up, debt gets paid down more quickly, and the reduced dividend might grow more quickly. If it doesn't pay up, we'll manage okay and the shares still look cheap.

[steeplejack] 09/3/2018 08:48

Yes,your are right of course.I confess I read that 20 cents as the final,equalising with the interim!The yield is indeed nearer 3.3 percent.Well larger than I thought but on balance I am optimistic that the shares will bottom around current levels.

[dons] 09/3/2018 08:42

Hi,At an annual divi of usd 0.2 the yield is more like 3.3% at 4.40

[raffles the gentleman thug] 09/3/2018 08:42

In my opinion it's a more healthy business than it was last quarter - only disappointment for me is the elongated duration of the capex cycle which is a full year longer than I had anticipated but offsetting that is the low valuation and improving EBITDA and cashflow outlook

[raffles the gentleman thug] 09/3/2018 08:40

and one mustn't ignore the $19m of costs taken out of the business in Q4

[steeplejack] 09/3/2018 08:33

Very true.The management were not on top of things and it was ultimately left to the market to do the sums and suggest ISAT would do better to retain cash flow rather than splash out on the dividend.The yield on a dividend of 20c is around 3.3 per cent at 440p.
Having bitten the bullet,realism should be rewarded.

(I have corrected my earlier post that mistakenly read the RNS as saying that the final dividend was cut to 20 cents.The severity of the cut explains the price fall today because I suspect a lesser cut was discounted but this is a cut in overall payments of two thirds)

[raffles the gentleman thug] 09/3/2018 08:24

Just starting to but at 434p funny enough