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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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Satcom Grp | LSE:SGH | London | Ordinary Share | GB00B0D66620 | ORD USD0.10 |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 9.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
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0 | 0 | N/A | 0 |
RNS Number:1647Z SatCom Group Holdings plc 02 March 2006 Press Release 2 March 2006 SatCom Group Holdings Plc ("SatCom" or "the Group") Interim results for the six months ended 31 December 2005 SatCom Group Holdings Plc (AIM: SGH), a leading reseller of mobile satellite communications equipment and airtime, announces its interim results for the six months ended 31 December 2005. Highlights * Turnover up 24.7% to $27.8 million (2004: $22.3 million) * EBITDA up 12.9% to $1.72 million (2004: $1.52 million) * Profit before tax up 8.6% to $1.35 million (2004: $1.25 million) * Basic earnings per share up 11.6% to 1.92 cents (2004: 1.72 cents) * Group's first interim dividend as a public company of 0.15 cents per share announced * Flotation on AIM on 15 July 2005, raising #3.5 million (gross) * Acquisition of Horizon Mobile Communications Group ("HMC") in September 2005. HMC is predominately based in Asia supplying satellite communications and IT solutions to maritime customers Commenting on the results, Mark White, Chief Executive, of SatCom, said: "These results clearly demonstrate the Group's ability to deliver earnings enhancing acquisitions in key global locations as set out in the AIM admission document." For further information: SatCom Group Holdings Plc Mark White, Chief Executive Officer Tel: +44 (0) 1722 439206 mark.white@satcomgroup.com Martin Ward FCA, Chief Financial Officer Tel: +44 (0) 1722 439201 martin.ward@satcomgroup.com www.satcomgroup.com Teather & Greenwood Limited (Broker) Stephen Austin - Corporate Finance Tel: +44 (0) 20 7426 9000 Stephen.Austin@teathers.com www.teathers.com Ernst & Young LLP (Nominated Adviser) John Stephan Tel: +44 (0) 20 7951 2000 jstephan@uk.ey.com www.ey.com Media enquiries: Abchurch Heather Salmond / Dana Thomas Tel: +44 (0) 20 7398 7700 heather.salmond@abchurch-group.com www.abchurch-group.com Interim Statement Financial Review Turnover for the six months ended 31 December 2005 increased by 24.7% to $27.8 million (2004: $22.3 million). Adding to the continued growth was the acquisition of Horizon Mobile Communications Group ("HMC") on 26 September 2005. Whilst SatCom saw the turnover of Land Mobile Satellite Services division decrease in line with the rest of the industry as military usage in the Middle East reduced, this reduction was offset by an increase in the Group's margin as low margin GSM calls were reduced significantly leaving SatCom to benefit from higher margin usage. In late 2005, SatCom opened a subsidiary in Dubai to develop the Middle East and African markets and it is expected that this location will enhance the Group's ability to react to events in that part of the world as well as expanding its global footprint. The Group's Earnings Before Interest, Tax, Depreciation and Amortisation (" EBITDA") rose by $200,000 to $1.72 million over the same period in 2004. This was an excellent result as the corresponding period last year included a very profitable contract which ceased in November 2004 and significantly enhanced last year's turnover and earnings. Basic earnings per share have increased to 1.92 cents, a rise of 0.20 cents per share or 11.6% on same period last year. Included in this period's results were legal expenses incurred regarding action taken by SatCom in a dispute with a supplier. This legal action was concluded in November 2005 and the cost to SatCom was $125,000 in legal fees. Without these costs, EBITDA would have risen by 21.1% to $1.84 million and the basic earnings per share would have reached 2.09 cents. Flotation The Group raised #3.5 million (Gross) on flotation in July 2005 by a combination of ordinary shares (#0.5 million) and Convertible Unsecured Loan Stock ("CULS") (#3.0 million). The CULS have a coupon of 8% and are repayable in July 2009. The CULS holders have the option to convert into ordinary shares at 39p per share at anytime prior to redemption. The funds raised were used to finance the flotation costs and the initial payment on the acquisition of HMC. Acquisitions The acquisition of HMC and its brand brought a new area of Mobile Satellite Services to SatCom, namely the commercial shipping trade. HMC have a significant customer base in shipping fleets and offshore oil & gas rigs and since the acquisition SatCom have set up HMC operations in Houston, Texas and the UK to increase the worldwide coverage of HMC service. In addition to satellite communication, HMC offer IT and Mail solutions to their maritime customers, which improves margins and customer retention. HMC was acquired in September 2005 for an initial consideration of $4.8 million including professional costs. There are deferred payments based on HMC's gross profits earned in 2005 and 2006. At the date of acquisition, the expected payouts were forecast to be in the region of $1,400,000, payable in new shares and cash based on HMC achieving target gross profit levels. On acquisition the fair value of HMC's net assets totalled $1.4 million and accordingly goodwill of $4.8 million was recognised. The goodwill is shown under Intangible Assets and is being amortised over 20 years. HMC has proved to be an earnings-enhancing acquisition during the three month period of its ownership to 31 December 2005 and has enabled SatCom to achieve some of its initial key objectives, namely strengthening the Group's presence in Asia, as well as commencing the growth into commercial shipping communications. We expect the impact of this acquisition to grow in future periods as the HMC brand is expanded across the other global locations of SatCom. The Group acquired Net Africa Arabia Limited, an Inmarsat Distribution Partner, in December 2005. This acquisition is expected to improve the margin and revenue of future data traffic. Dividends SatCom intends to pay an interim dividend of 0.15 cents per ordinary share (approximately 0.08 pence). This will be paid on 7 April 2006 to all shareholders on the register at 8 March 2006. In accordance with FRS21 the dividend payment will be set against profit in the second half of this financial year. This represents the first dividend paid by the Company following its admission to AIM on 15 July 2005 and is in accordance with the stated dividend policy in the Group's AIM admission document. Outlook The Group will continue its acquisition strategy, targeting profit-enhancing companies with strong airtime revenues and in global locations that assist the sales profile of new and existing Group products. SatCom's management are determined not to overpay for acquisitions and whilst looking to pursue the acquisition strategy, remain willing to walk away from dilutive deals. SatCom sees significant organic growth opportunity in high-speed data equipment and airtime with the recent launch of Inmarsat's BGAN services. SatCom will continue to look for further opportunities to reduce costs throughout its operations. David Hickey Mark White Chairman Chief Executive Officer 1 March 2006 Group profit and loss account Consolidated accounts for the six months ended 31 December 2005 Notes Unaudited Unaudited Audited half year 31 Dec 05 half year year ended $'000's 31 Dec 04 30 Jun 05 $'000's $'000's Turnover 2 Continuing operations - Ongoing 24,893 22,318 47,457 - Acquisitions 2,942 - 473 27,835 22,318 47,930 Cost of sales (23,553) (18,913) (40,684) Gross profit 4,282 3,405 7,246 Administrative expenses (2,563) (1,882) (4,213) EBITDA 1,719 1,523 3,033 Depreciation and amortisation (204) (106) (186) Operating profit (EBIT) 3 Continuing operations - Ongoing 1,252 1,417 2,928 - Acquisitions 263 - (81) 1,515 1,417 2,847 Net interest and similar charges (161) (91) (166) Share of joint venture losses - (79) (79) Profit on ordinary activities before taxation 1,354 1,247 2,602 Taxation on ordinary activities 4 (419) (415) (967) Profit on ordinary activities after taxation 935 832 1,635 Minority interests 37 - 35 Profit attributable to members of 972 832 1,670 the parent company Dividends - (181) (181) Retained earnings 972 651 1,489 Basic earnings per share 6 1.92 cents 1.72cents 3.45cents Diluted earnings per share 6 1.91 cents 1.72cents 3.44cents Group balance sheet Consolidated accounts as at 31 December 2005 Unaudited Unaudited Audited half year half year year ended 31 Dec 05 31 Dec 04 30 Jun 05 Notes $'000's $'000's $'000's Fixed assets Intangible assets 6,578 1,154 1,172 Tangible assets 919 309 399 7,497 1,463 1,571 Current assets Stocks 2,959 1,250 1,694 Debtors falling due within one year 14,356 8,279 10,789 Cash at bank and in hand 2,199 2,190 5,161 19,514 11,719 17,644 Creditors: (19,567) (15,476) (19,355) amounts falling due within one year Net current liabilities (53) (3,757) (1,711) Total assets less current liabilities 7,444 (2,294) (140) Creditors: (6,435) (40) (1,538) amounts falling due after one year Provisions for liabilities and charges (19) (16) (19) 990 (2,350) (1,697) Minority interests 138 (84) 101 Net assets / 1,128 (2,434) (1,596) (liabilities) Capital and reserves Called-up share capital 5,250 4,845 4,935 Share premium account 723 - - Contingent share capital 10 714 - - Merger reserve 11 (10,884) (10,884) (10,884) Profit and loss account 5,325 3,605 4,353 Equity shareholders' funds 1,128 (2,434) (1,596) Group cash flow Consolidated accounts for the six months ended 31 December 2005 Unaudited Unaudited Audited half year half year year ended 31 Dec 05 31 Dec 04 30 Jun 05 Notes $'000's $'000's $'000's Net cash (outflow)/inflow from operating (2,380) 1,956 6,019 activities 5 (b) Net interest paid (157) (83) (155) Interest element of hire purchase (4) (4) (8) Net cash outflow from returns on investments and servicing of finance (161) (87) (163) Taxation (594) (478) (629) Purchase of intangible fixed assets (472) - (18) Purchase of tangible fixed assets (367) (77) (222) Net cash outflow for capital expenditure (839) (77) (240) Purchase of subsidiary undertakings 5 (c) (4,779) (252) (252) Net cash acquired with subsidiary 867 6 104 undertakings Net cash outflow from acquisitions (3,912) (246) (148) Equity dividends paid - (181) (181) Net cash (outflow)/inflow before use of liquid resources and financing (7,886) 887 4,658 Issue of ordinary share capital (net of costs) 1,038 - - Issue of Convertible Unsecured Loan Stock ("CULS") 5,467 - - Decrease in short term borrowing (1,558) (331) (1,107) Capital element of hire purchase (23) (27) (51) Net cash inflow/(outflow) from financing 4,924 (358) (1,158) (Decrease)/increase in net cash (2,962) 529 3,500 Notes to the interim statement 1. Basis of preparation The interim statement for the six months to 31 December 2005 has been prepared on the basis of the accounting policies applied in the Group's statutory accounts for the year to 30 June 2005. The interim statement does not constitute statutory accounts as defined by Section 240 of the Companies Act 1985. The information for the year to 30 June 2005 has been extracted from the full financial statements for that year, which received an unqualified audit report, and which, have been filed with the Registrar of Companies. 2. Turnover by geographical destination of customer Unaudited Unaudited Audited half year half year year ended 31 Dec 05 31 Dec 04 30 Jun 05 $'000's $'000's $'000's European Union 2,871 2,801 6,096 United States 20,183 18,693 40,070 Asia 3,205 150 321 Rest of World 1,576 674 1,443 27,835 22,318 47,930 3. Operating profit Operating profit is stated after charging: Unaudited Unaudited Audited half year half year year ended 31 Dec 05 31 Dec 04 30 Jun 05 $'000's $'000's $'000's Depreciation 107 46 113 Amortisation 97 60 73 Auditors' remuneration 40 15 30 Operating lease costs: land and buildings 75 35 74 Net loss on foreign currency translation 8 37 31 4. Taxation The tax charge of $419,000 (2004: $415,000) is calculated by applying the effective tax rate for each of the Group's material tax jurisdictions to the profit before tax in each jurisdiction. 5. Cash flow Unaudited Unaudited Audited half year Half year year ended 31 Dec 05 31 Dec 04 30 Jun 05 $'000's $'000's $'000's (a) Reconciliation to net debt (Decrease)/increase in net cash (2,962) 529 3,500 Net cash outflow from hire purchase and other loans 1,581 358 1,158 Change in net funds resulting from cash (1,381) 887 4,658 flows Opening net funds/(debt) 1,571 (3,087) (3,087) Closing net funds/(debt) 190 (2,200) 1,571 Being: Cash 2,199 2,190 5,161 Hire purchase obligations (43) (90) (66) Directors' loan accounts (1,966) (4,300) (3,524) Closing net funds/(debt) 190 (2,200) 1,571 (b) Reconciliation of operating profit to net cash (outflow)/ inflow from operating activities Operating profit 1,515 1,417 2,847 Depreciation 107 46 113 Amortisation 97 60 73 (Increase)/decrease in stocks (621) (332) (708) (Increase)/decrease in debtors (1,267) 503 (2,345) Increase/(decrease) in creditors (2,211) 262 6,039 Net (outflow)/cash flow from operating (2,380) 1,956 6,019 activities (c) Purchase of subsidiary undertakings Net assets acquired, in respect of the acquisition of Horizon Mobile Communications Group ("HMC") in September 2005, were as follows: Tangible fixed assets 459 Stocks 644 Debtors 2,300 Cash 867 Creditors (2,895) 1,375 Goodwill 3,404 4,779 6. Earnings per share The calculations of the earnings per ordinary share are based on the earnings attributable to shareholders and the following data. In July 2005, as part of the company's flotation, the number of fully paid ordinary shares in issue was increased from 48,450,000 to 50,116,667. In October 2005, a further 1,482,155 new ordinary shares were issued in part consideration of the acquisition of Horizon Mobile Communications Group. The basic earnings per share figure averages the effect of these increases and the diluted earnings per share figure also takes into account share options and CULS which, if converted, would increase the weighted average share capital by 7,530,718 and would increase attributable profit by $137,247. 7. Investments Details of the trading investments in which, as at 31 December 2005, the group holds 20% or more of the nominal value of any class of share capital, are as follows: Name of subsidiary Holding % of shares held Nature of business Country SatCom Distribution Ltd Ordinary 100% Distribution of satellite UK shares communication equipment and airtime SatCom Distribution Inc Ordinary 100% Distribution of satellite USA shares communication equipment O'Gara Satellite Systems Inc Ordinary 100% Distribution of satellite USA shares communication airtime Northstar Communications Inc Ordinary 80% Distribution and satellite USA shares installation of HF Radio equipment SatCom Distribution (Asia) Ordinary 60% Distribution of satellite Hong Kong Ltd shares communication equipment SatCom Distribution Middle Ordinary 55% Distribution of satellite UAE East FZ LLC shares communication equipment Horizon Mobile Ordinary 100% Interim group Thailand Communications Co Ltd shares administration and customer support Horizon Mobile Ordinary 100% Distribution of satellite Singapore Communications Pte shares communication equipment (Singapore) Ltd Horizon Mobile Ordinary 100% Distribution of satellite Australia Communications (Australia) shares communication equipment Pty and airtime HMC America Ltd Limited 80% Distribution of satellite USA partnership communication equipment and airtime Net Africa Arabia Ltd Ordinary 100% Distribution of satellite UK shares communication airtime 8. Share options On 8 July 2005, options over 76,360 Ordinary shares of $0.10 each were granted to a customer of the Group as set out in the company AIM admission document dated 15 July 2005. The exercise price of this grant is 9.625p per share. On 28 October 2005, options over a total of 173,838 Ordinary shares of $0.10 each in the Company were granted to Group employees (none of whom were directors). The exercise price of this grant is 34p per share. On 23 December, options over a total of 19,188 Ordinary shares of $0.10 each in the Company were granted to Group employees, none of whom were directors. The exercise price of these options is 30p per share. As at 31 December 2005, 181,571 options were outstanding under an Enterprise Management Incentive Scheme and 212,456 options were outstanding under an Unapproved Scheme for overseas employees. 9. Reconciliation of movements in shareholders' funds Unaudited Unaudited Audited half year half year year ended 31 Dec 2005 31 Dec 2004 30 Jun 2005 $'000's $'000's $'000's Profit for the financial period 972 832 1,670 Dividends paid - (181) (181) Bonus issue of shares - - (90) 972 651 1,399 Contingent share capital 714 - - New shares issued (net of costs) 1,038 - 90 Net movement in shareholders' funds 2,724 651 1,489 Opening shareholders' funds/(deficit) (1,596) (3,085) (3,085) Closing shareholders' funds/(deficit) 1,128 (2,434) (1,596) 10. Contingent share capital Under the terms of the acquisition of Horizon Mobile Communications Group ("HMC "), SatCom have deferred consideration to pay based on the gross profit achieved by HMC in the two years ended 31 December 2006. The deferred consideration is payable 50% by cash and, subject to SatCom share price at the time of issue, 50% by the issue of new ordinary shares in SatCom at a 5% discount to the average closing mid price over the previous month. Based on the forecasted results, SatCom expects to have an obligation in deferred consideration of $1.428 million of which 50% will be settled in new shares with a value of $714,000. The payment dates are at the end of March 2006 and March 2007. 11. Merger reserve The acquisition by the Company of SatCom Distribution Limited and its subsidiaries in May 2004 has been accounted for as a merger. Accordingly a debit merger reserve has been recognised in the consolidated balance sheet representing the difference between the consideration paid to acquire the group and its net assets at the date of the transaction. - Ends - This information is provided by RNS The company news service from the London Stock Exchange END IR SSEFAFSMSEFD
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