Satellite Solutions reaching for the sky


House broker Numis said revenues were ahead of its forecasts, reflecting organic growth of 12%, and EBITDA is expected to be above its forecast of £4.5mln

Wireless communications

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Price: 103.5 GBX

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Satellite Solutions Worldwide Group PLC (LON:SAT) saw its shares rise on Wednesday after the provider of alternative super-fast broadband services said it expects to post a “material increase” in earnings this year.

The company said it has successfully integrated seven earnings-enhancing acquisitions and is targeting organic customer growth of more than 50% by 2020.

READ: Satellite Solutions Worldwide lands European broadband deal with Viasat-Eutelsat venture

As for the financial year just ended, year-on-year like-for-like organic revenue growth in the 12 months to 30 November was 12%, with total revenue doubling to £44mln from £22mln the year before.

Recurring revenue rose 119% to around £40mln from £18mln, and now represents around 90% of total revenue.

The group said average revenue per user increased significantly during the period while customer numbers broke through the 100,000 barrier ahead of schedule.

The gross profit margin expanded by a couple of points to 36%.

Underlying earnings (EBITDA) are expected to exceed £4.5mln, up from £1.2mln the previous year, despite continued investment in the company's products.

At the end of the financial year, net debt had deepened to £12.8mln from £10.2mln, partly as a result of acquisitions but also the aforementioned investment for growth.

READ: SSW finishes remote Norwegian project ahead of schedule

The company has appointed former Fox Networks luminary Mark Anderson as chief operating officer, reporting directly to the chief executive officer, Andrew Walwyn.

"We are delighted with our performance during the period as the company successfully expanded its routes to market as well as its geographic reach. Importantly, the company now has the foundations in place for a step change in our growth trajectory as we take advantage of technological developments and offer services on a par with traditional broadband solutions,” Walwyn said.

"The convergence of innovation within the industry, which is delivering ever increasing speeds and ongoing Government subsidies continue to improve the economics of wireless broadband as well as underpinning both the near and long-term growth in demand for our offering to rural areas and we look forward to taking advantage of the growing opportunity," Walwyn said.

House broker Numis Securities said revenues of around £44mln were ahead of its forecast of £41.5mln, while EBITDA was bang in line with the broker's estimate.

“The balance sheet is in better than expected shape, with the company ending the year with net debt of £12.8mln vs NSe [Numis] £14.7mln,” the broker said.

Numis's estimates for the current financial year remain unchanged, what with 10 months of the financial year still left to run.

In late afternoon trading, SSW shares were up 1.8% at 8.65p.

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