(SGH.L) SatCom Group Holdings PLC Buy/Sell

RNS Number : 4888C SatCom Group Holdings plc 13 November 2009

Press Release 13 November 2009

SatCom Group Holdings plc

("SatCom" or "the Group")

Preliminary Statement of Results for the Year Ended 30 June 2009

SatCom Group Holdings plc, a distributor of satellite communications, announces its unaudited preliminary results for the year ended 30 June 2009.

Financial Highlights

* Turnover increased 43% to US$103 million (FY 2008: US$72.1 million) * Group EBITDA increased by 13% to US$6.8 million (2008: US$6 million) * Basic EPS increased by 11.3% to 6.87 cents (2008: 6.17 cents) * Final dividend proposed of 0.50 cents per share (2008: 0.40 cents).

Operational Highlights

* Addition of Inmarsat's Fleet Broadband to Company portfolio * Investment in improved customer service via investing in a new facility in

Australia and relocating our 24/7 customer service centre and merging it

with that of SDN.

Chairman and Chief Executive Officer's Statement

HIGHLIGHTS

The Group has once again performed strongly, with revenues increasing in spite of the global downturn, though the economic climate remains challenging. However, the Mobile Satellite Services (MSS) sector continues to be both resilient and dynamic and looking forward, the Group is well positioned to take advantage of this.

The requirement for ever-increasing data speeds, both on land and at sea, has led to increased demand for both mobile and fixed satellite services and we have now added Inmarsat's Fleet Broadband to our portfolio, whilst our investment in the VSAT business via our subsidiary SDN, continues to bring returns.

In pursuit of ever-better customer service in the markets we serve, the Group has continued its international expansion, investing in a new facility in Australia and relocating our 24/7 customer service centre and merging it with that of SDN. We have also invested in communications infrastructure to ensure that all Group locations are fully interconnected by a high-speed global network.

The attached accounts of SatCom Group Holdings Plc ("SatCom" or the "Group") show a significant year of revenue growth and continued growth in profitability. In the last year the Group has concentrated on integrating and growing the business during the difficult financial times of 2009.

FINANCIAL PERFORMANCE

I am pleased to report that the Group's results show increases across the board when compared with 2008 numbers. The Group's turnover showed an increase of 43% to $103 million with both Mobile Satellite Services ("MSS") and VSAT sectors contributing strongly. The MSS sector showed growth in broadband products in both maritime and land based services. As expected, the blended gross profit margin reduced from 22.5% to 18.8% due to the increase in revenue from US Government contracts which is at lower margins. Overheads increased by 28%, due to a full year of SDN costs being included (2008: 2 months only). The Group EBITDA has increased by 13% to $6.8 million (2008: $6.0 million).

The basic earnings per share has increased by 11.3% to 6.87 cents (2008: 6.17 cents) and diluted earnings per share has increased by 14.6% to 6.75 cents (2008: 5.89 cents). The percentage increase in earnings per share has been affected by the increase in average number of shares in issue for the year as set out in Note 3 to these accounts. SatCom continues its progressive dividend policy and it is the Board's intention to propose a final dividend of 0.50 cents per share (2008: 0.40 cents). This dividend when added to the interim dividend paid in April 2009 will provide total income of 0.75 cents per share (2008: 0.60 cents) representing a 25% increase over 2008.

The Group continues to invest in the IT involved in delivering higher quality service to customers globally through our integrated billing system and global broadband infrastructure.

In June 2009, the Group negotiated new facilities with HSBC which were used to redeem Convertible Unsecured Loan Stock totalling £3,000,000 and US$600,000.

STRATEGY AND PROSPECTS

We have continued to develop our broadband range of products and services in both the MSS and VSAT sectors and expect these sectors to continue to grow. The Group is investing in value added products to complement these broadband products.

SatCom continues to look at possible strategic acquisitions if and when opportunities arise.

We thank the Group's employees around the world for their efforts in the last year and also thank our customers for their business and look forward to working with them in 2010.

RICHARD VOS MARK WHITE

CHAIRMAN CHIEF EXECUTIVE OFFICER

For further information:

SatCom Group Holdings plc
Mark White, Chief Executive Officer Tel: +44 (0) 1722 439 206
mark.white@satcomgroup.com www.SatComgroup.com

Martin Ward, Chief Financial Officer Tel: +44 (0) 1722 439 201
martin.ward@satcomgroup.com www.SatComgroup.com

Arden Partners plc
Fred Walsh / Matthew Armitt Tel: +44 (0) 207 398 1651

fred.walsh@arden-partners.com www.arden-partners.co.uk

Media enquiries: Abchurch
Heather Salmond / Mark Dixon Tel: +44 (0) 20 7398 7729

mark.dixon@abchurch-group.com www.abchurch-group.com

Consolidated income statement for the year ended 30 June 2009

$'000 $'000

Revenue
Continuing operations 103,728 72,070
Group revenue 103,728 72,070
Cost of sales (84,195) (55,825)
Gross profit 19,533 16,245
Administration expenses (13,729) (10,731)

Operating profit
Continuing operations 5,804 5,514
Group operating profit 5,804 5,514
Interest receivable and similar income 5 81
Finance costs (1,043) (998)
Profit on ordinary activities before taxation 4,766 4,597
Taxation (668) (918)
Profit for the financial year 4,098 3,679

Attributable to:
Equity holders of the parent company 4,098 3,679
4,098 3,679

Earnings per share
Basic 6.87 cents 6.17 cents
Diluted 6.75 cents 5.89 cents

There were no recognised gains or losses other than those shown in the consolidated income statement.

Consolidated balance sheet as at 30 June 2009

$'000 $'000

Assets

Non-current assets

Goodwill 18,739 18,045
Intangible fixed assets 2,831 1,406
Property, plant and equipment 2,709 1,775
24,279 21,226

Current assets

Inventories 5,880 5,475
Trade and other receivables 19,307 17,523
Bank balances and cash 2,774 2,097
27,961 25,095

Current liabilities
3,599 658

Financial liabilities
Convertible unsecured loan stock 1,223 6,451
Trade and other payables 21,417 19,277
Current tax 1,442 1,028
Obligations under finance leases 143 197
27,824 27,611
Net current (liabilities) / assets 137 (2,516)

Non-current liabilities
Financial liabilities 7,930 4,977
Convertible unsecured loan stock - 898
Obligations under finance leases 76 137
8,006 6,012
Net assets 16,410 12,698

Shareholders' equity
Share capital 6,053 6,053
Share premium account 4,845 4,845
Merger reserve (10,884) (10,884)
Retained profits 16,396 12,684
Total shareholders funds 16,410 12,698
16,410 12,698

Consolidated statement of changes in equity for the year ended 30 June 2009

Share Capital Share Premium Merger reserve Contingent Retained profits Total
$'000 $'000 $'000 Share Capital $'000 $'000
$'000
Restated Balance at 30 June 6,053 4,845 (10,884) 500 9,321 9,835

Changes in Equity for 2008
Profit for the year - - - - 3,679 3,679
Dividends paid - - - - (316) (316)
Adjustment to contingent share - - - (500) - (500)

capital for consideration paid in cash

Balance at 30 June 2008 6,053 4,845 (10,884) - 12,684 12,698

Changes in equity for 2009

Profit for the year - - - - 4,098 4,098
Dividends paid - - - - (386) (386)
Balance at 30 June 2009 6,053 4,845 (10,884) - 16,396 16,410

Consolidated cash flow statement for the year ended 30 June 2009

$'000 $'000 $'000 $'000
Net cash generated from 5,677 4,585

operating activities

Cash flows from investing activities

Interest received 5 81
Purchase of intangible fixed (1,854) (673)

assets
Purchase of property, plant (1,480) (366)

and equipment
Acquisition of subsidiary (net (694) (4,649)

of cash acquired)

Net cash used in investing (4,023) (5,607)

activities

Cash flows from financing activities

Dividends paid (386) (316)
Redemption of Convertible (6,257) -

Unsecured Loan Stock ("CULS")
Increase / (Decrease) in short 488 (267)

term borrowing
Net increase in long term 5,394 2,885

borrowing
Capital element of finance (216) (142)

lease rental payments

Net cash generated by (977) 2,160

financing activities
677 1,138

Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at 2,097 959

beginning of year

Cash and cash equivalents at 2,774 2,097

end of year

1. This preliminary announcement was approved for issue by a duly appointed and authorised committee of the Board of Directors on 12 November 2009.
2. Basis of preparation

The financial information set out in this announcement is unaudited and does not constitute statutory financial statements for the year ended 30 June 2009 or 30 June 2008 within the meaning of Section 434 of the Companies Act 2006. The audit report on the full financial statements has not yet been signed.

3. Earnings per share

The calculations of basic and diluted earnings per share are based on the following data:

$'000 $'000
Profit for the purpose of basic earnings per 4,098 3,679

share Effect of dilutive potential ordinary shares:
Interest on convertible loan notes 42 421
Profit for the purposes of diluted earnings per 4,140 4,100

share
No. of shares No. of shares
Weighted average number of ordinary shares in 59,628,644 59,628,644

issue during the year

Effect of dilutive potential ordinary shares:
Staff options 510,305 306,278
Convertible loan notes 1,153, 846 9,615,685
Diluted weighted average number of ordinary 61,292,795 69,550,607

shares in issue during the year

4. Segmental analysis

For management purposes, the group is currently organised into 4 geographical operating divisions - European Union, United States, Asia and Rest of World. These divisions are the basis on which the Group reports its primary segment information.

Segmental information on a Group basis is set out below:

European Union United States Asia Rest of World Group

$000's $000's $000's $000's $000's $000's $000's $000's $000's $000's

Revenue

Revenue by destination

Sales to third
parties 14,418 12,526 64,507 36,073 18,109 18,504 6,694 4,967 103,728 72,070

Revenue by origin
Total sales 6,403 13,619 58,065 27,757 62,207 44,990 1,873 2,409 128,548 88,775
(3,213) (6,441) (1,120) (20,248) (8,289) (239) (34) (24,820) (16,705)

Inter-segment sales

(1,941)

Sales to third parties 3,190 7,178 56,945 25,816 41,959 36,701 1,634 2,375 103,728 72,070

Results

Segment profit 1,042 136 1,121 977 4,198 4,473 (348) 147 6,013 5,733

Common costs (209) (219)

Operating 5,804 5,514

profit

Net interest (1,038) (917)

Group profit before taxation
4,766 4,597

Other

Capital additions 366 122 434 184 2,635 846 - - 3,435 1,152
139 150 360 151 576 205 1 - 1,076 506

Depreciation and amortisation Net assets

Segment net assets 1,009 1,010 (820) (1,188) 12,587 9,690 (346) 111 12,430 9,623

Unallocated 3,980 3,075

assets

Total net assets 16,410 12,698

This information is provided by RNS The company news service from the London Stock Exchange

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