Inmarsat share price rockets after announcing landmark tie-up with British Airways
Inmarsat shares jumped over six per cent this morning after announcing a landmark tie-up BA that it is to be the first airline to provide high speed in-flight broadband to customers.
The satellite firm also revealed it had grown group revenue and earnings over the last year, although bottom line figures fell.
The figures
Group revenue increased by 4.3 per cent from $1.27bn (£1.04bn) to $1.33bn with earnings up 9.5 per cent at $795m from $726m the year before.
Revenues of the group's largest division, maritime, fell three per cent to $575m but its government (the firm's second largest business unit) and aviation (fourth largest) arms fared better, up 15.3 per cent and 12.5 per cent respectively.
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Profit after tax fell 13.7 per cent from $282m to $243m.
The group increased its final dividend by five per cent to 33.37c per share.
Why it's interesting
Inmarsat's shares took a hammering in January, with the FTSE 250 firm hitting the returns of one of the City's oldest hedge funds.
But since the start of February they are up over 20 per cent.
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The Islington-based firm is pushing its aviation unit hard, and the group hopes that today's announcement of a tie-up with BA, as well as the carrier's sister airlines (Iberia and Aer Lingus among others), will be the start of similarly partnerships with other airlines.
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“Passenger demand for in-flight broadband has never been stronger and Inmarsat’s cutting-edge technology will remain the market’s gold standard for a long time to come," said Inmarsat's president of aviation Leo Mondale, adding:
The rollout of our European Aviation Network, which we are building together with our partner Deutsche Telekom, is progressing at full pace and today’s contract signing with IAG as our launch customer has reinforced once again how Inmarsat’s aviation strategy is coming together.
What the company said
Chief exec Rupert Pearce said:
Despite a challenging operating environment in our markets, we delivered a robust performance in 2016.
Inmarsat remains well-positioned to take advantage of a number of significant growth opportunities in the coming years, supported by our unique skills and experience in global, mobile, broadband services, our solutions-based offerings, our strong global networks and our market-leading distribution channels.
"Our investment strategy is targeted towards maximising these future growth opportunities.
"Our progress in 2016 will provide a solid foundation for continued delivery of the growth and diversification of Inmarsat into the future."