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Inmarsat PLC

Inmarsat plc Growth continues

Inmarsat plc (LON: ISAT), the world leader in global mobile satellite communications, today announces unaudited financial results for the three months ended 31 March 2019.

Summary and Financial Highlights

Inmarsat delivered further revenue growth in the period, building on the positive momentum achieved during 2018. This was driven by the success of our diversified growth portfolio in a focussed set of core end markets, where we lead with sustainable differentiation.

$ in millions

First Quarter




Change (%)

Group revenue

























Ligado and other1













(326.0) (326.0)


Operational Highlights
· Group revenue increased by $1.5m, or 0.4% to $346.9m. Excluding Ligado, Group revenue increased by $33.4m, or 10.7% to $346.7m, mainly reflecting strong growth in Government and Aviation:

– Maritime: continued double-digit revenue growth in the fast-growing VSAT segment. Challenges remain in the mid-market but actions taken now favourably impacting vessel losses

– Government: further customer take-up of key products in both our US and Global Government businesses

– Aviation: material increase in In-Flight Connectivity (“IFC”) revenues, driven by substantial equipment sales and continued growth in GX airtime revenues. Continued revenue growth from Core business

– Enterprise: continued decline of products in legacy markets

– GX-generated revenues: increased by 71.4% to $85.7m (Q1 2018: $50.0m)

– Ligado: revenues of $0.2m (Q1 2018: $32.1m), as expected

· EBITDA decreased by $22.5m, or 12.9%, to $152.4m. EBITDA (excluding Ligado and costs relating to recommended offer for the Group) increased by $26.6m, or 18.7%, to $169.4m, reflecting revenue growth

· Profit After Tax declined by $326.0m, mainly reflecting a change in the unrealised conversion liability on the 2023 Convertible Bond of $297.9m, as well as costs relating to recommended offer for the Group of $17.0m

· Free Cash Flow of $96.2m (Q1 2018: $13.2m outflow) driven by improved working capital and reduced levels of capital expenditure

Recommended offer for the Group:

· Subject to shareholders’ vote on 10 May 2019 and regulatory approvals. Transaction expected to be completed during Q4 2019

1 Comprises revenue contribution from Central Services and Ligado Networks.

2 In response to the Guidelines on Alternative Performance Measures (‘APM’s) issued by the European Securities and Markets Authority, we have provided additional information on the APMs used by the Group, including definitions and reconciliations to statutory measures, within Appendix 1 of this document.

Rupert Pearce, Chief Executive Officer, commented on the results:

“Inmarsat produced a strong underlying performance during the first quarter of the year, building on the positive momentum achieved during 2018. We continue to successfully build and aggressively defend market share in our target markets, supported by our diversified product portfolio, enabling the business to capitalise on the significant growth opportunities in these markets.”

Future Guidance

The Board remains confident about the future prospects and outlook for the Group, reflecting the market opportunity and Inmarsat’s capabilities. Consequently, the Board reiterates the following guidance, which is unchanged from March 2019:

· A target of mid-single digit percentage revenue growth on average over the five year period, 2018 to 2022, with EBITDA and Free Cash Flow generation improving steadily1

· 2019 revenue, ex Ligado, of $1,300m to $1,400m

· Annual GX revenues at a run rate of $500m by the end of 2020

· Cash Capex of $500m to $600m per annum for 2019 and 2020

· Capex is expected to meaningfully moderate after 2020, falling initially to within a range of $450m to $550m in 2021

· Ratio of Net Debt to EBITDA to normally remain below 3.5x

This guidance excludes any impact from any successful acquisition of, or any unsuccessful attempt to acquire, the Group.

The reference to EBITDA and Free Cash Flow generation over the five year period 2018 to 2022, in the first bullet point above, constitutes an ordinary course profit forecast for the purposes of Rule 28.1 of the City Code on Takeovers and Mergers (the “Takeover Code”) (the “Inmarsat Profit Forecast”).

The basis of preparation and assumptions in respect of the Inmarsat Profit Forecast are set out in Part 5 of the scheme document published by Inmarsat dated 18 April 2019 (the “Scheme Document”).

In accordance with Rule 27.2(d) of the Takeover Code, the Inmarsat Directors have considered the Inmarsat Profit Forecast and confirm that it remains valid as at the date of this announcement.

Results conference call

Inmarsat management will discuss the results on a conference call on Wednesday 1 May at 08.00am UK time. The call can be accessed by dialling +44 (0) 20 7192 8000 (from the UK and Europe) or +1 631 510 7495 (from the US), with a passcode of 4483026 and is also accessible via this link: https://edge.media-server.com/m6/p/nwb43ifw.

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