BATM revenue ahead of expectations

published 11 April 2012

BATM Advanced Communications, a designer and producer of telecom systems and medical laboratory diagnostic systems, performed slightly ahead of internal expectations in the first quarter.

Total revenues for the quarter were $24.9m, higher than expected, but lower on a like-for-like basis (2010 Q1: $27.4m).

During the period, 52% of the sales came from the telecoms divsion and 48% from the medical division, compared to 66% and 34% respectively in the first quarter of 2011.

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The gross margin was lower during the period in 2012 compared to the year before, as a result of a higher mix of Medical sales - but nonetheless met the company's internal targets.

At March 31st the firm's cash balance was $42.7m, down $4.2m comapred to three months previously, following the repayment of a long term loan.

"BATM has achieved its goals for the first quarter and significant progress has been made in the Medical Division," the company said.

"Despite the challenging commercial macro environment we believe we are on track to achieve our strategic, operating and financial targets for the full year and remain cautiously optimistic regarding the outlook for both of our divisions in the medium term."

House broker finnCap noted: "The reduced revenue from last year is down to the ongoing slowdown in Telco Systems sales whilst Medical division revenues continue to grow. However, this is as expected, and with margin improvements from Medical progress and the discontinuance of the legacy telecom operations, the group remains on track to meet our FY sales and profits forecast."

The group recently received CE certification for its HIV screening kit, and with further certifications likely this year, finnCap reckons the revenues from the diagnostics business should remain on an upward trajectory this year and next.

According to finnCap, the cash balance suggests an enterprise value - the theoretical takeover cost of the company - of $70m. With $26m of property on board, that leaves just $43m for the businss which will have sales of $115m and EBITDA [earnings before interest, tax, depreciation and amortisation] of $8.3m this year," the broker notes.

The share price rose 4.48% to 17.50p by 11:52.