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Sarantel www.sarantel.com/
Full Sarantel profile here

Sarantel’s revolutionary ceramic filtering antennas offer dramatically improved performance over existing antenna designs, resulting in a clearer signal, better range and a 90 per cent reduction in the amount of signal radiation absorbed by the body.

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Sarantel on path to healthy profits, says broker

Antenna technology specialist Sarantel (LON:SLG) will move close to profitability in 2013 as orders build from the military, according to broker Xcap.

The broker has also upgraded its forecast for 2012 from an underlying loss of £1.2 million to a £1 million deficit after the latest full year figures.

Xcap said the numbers were bang in line with its forecast, with the broker also raising its sales forecast by £0.3m to £3.5 million.

Its estimate for the year to September 2013 is for sales to rise to £5.3 million with Sarantel breaking even at the EPS level.

“These figures take no account of potential game-changing orders for consumer electronics appliances,” added Xcap.

“The earliest volume consumer application is likely to be a combined GPS/wifi unit for 35mm cameras. An initial order for, say 1m units, would add £0.9m to sales and £0.3m to profits.” 

Sarantel’s antennas are also accurate to within a metre, making it highly attractive on the battlefield.

Xcap says that in the past military orders have been lumpy and prone to unexpected slippage, but as the company wins more design-ins its revenues are becoming easier to predict.

On 7 February it announced a largest-yet order from a military radio supplier. 

The recent £2m loan facility at only 3% over libor also meaning Sarantel can fund itself to profitability, removing the threat of a further placing.

The broker added that Sarantel has reduced the size and cost of its antennas but a  volume price of $1.40 per unit still gives a 30% gross margin.

“Even without the consumer breakthrough, the company is on a clear path to healthy profits. We suspect our numbers will turn out to be very cautious. Meantime we remain comfortable with the 1.7p price target,” Xcap said.

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