Interim Management Statement
Oct 26, 2011
BATM Advanced Communications Limited ("BATM" or the "Company") (LSE: BVC), a leading designer and producer of telecom systems and medical laboratory diagnostic systems, is today issuing its Interim Management Statement for the period from 1 July 2011 to 30 September 2011.
Current trading update
Total revenues in the third quarter of 2011 (Q3) were $30.4 million, compared with $29.0 million in the equivalent period in 2010. This 5.0% increase in turnover during Q3 brings revenues for the nine months to September 30 to $95.0 million, an increase of 12.7% over the same period in 2010.
During the third quarter of the year the sales mix was 65% from the Telecoms division and 35% from the Medical division, compared to 68% and 32% respectively in the third quarter of 2010. Gross margin was slightly higher during the third quarter of 2011 over the same period last year.
Within the Telecom division the OEM business with Nokia Siemens Networks is expected to further decline in the coming quarter and this will impact the profitability of the Telecom division. The announcement made today regarding the signing of a major new global OEM vendor demonstrates the Company's commitment to and confidence in rebuilding the profitability of this aspect of the division.
Despite the uncertain global economic outlook, the Company continues to generate new business opportunities in both the Medical and Telecom divisions, and the Board expects this to continue.
The Company's balance sheet remains strong and as at October 24 the effective cash balance stood at $46.1 million, a decrease of $8.6 million compared to the position at 30 June 2011, mainly as a result of dividends and related tax payments of $5.8 million, and increased inventory of $1.5 million, which includes those of the ANDA Networks assets acquired in April.
New agreement signed
As announced this morning, we are pleased to have signed a new OEM agreement with the world's largest tier 1 telecom vendor. The agreement will see this leading vendor sell our Carrier Ethernet Access products through its many locations around the world. We believe this agreement demonstrates that our strategy of seeking alternative channels to the declining Nokia Siemens Networks business is succeeding. We expect to start generating significant revenues from this contract during 2012.
The Company has received approval from the Tel-Aviv Stock Exchange to dual list its shares there. We expect that the listing will become effective and trading will commence on this market before the end of the year, as previously announced.
The Board believes that the performance for the last quarter of this year will be similar to the third quarter, rather than the comparable period last year which was particularly strong. Therefore, we believe that the second half performance will be broadly in line with the first half of the year and as a result guidance for full year revenues will likely be in the region of $130 million with corresponding operating profit excluding amortisation of intangibles of $7.0 million.
- Ends -
BATM Advanced Communications +972 9866 2525
Dr Zvi Marom, Chief Executive
Ofer Bar-Ner, CFO
Threadneedle Communications 020 7653 9850
Josh Royston / Graham Herring
finnCap 020 7220 0500
Marc Young / Brian Patient
Shore Capital 020 7408 4090
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