Imarsat: Shareholders unhappy, but ambitious plans

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London-based satellite operator Inmarsat has suffered a 60 per cent shareholder rebellion over its CEO’s pay. Rupert Pearce received £1.9 million in total compensation last year, and shareholders were complaining that the reward was hardly commensurate with a tumbling share price and profits under pressure.

Today’s share price is around £3.78, but a year ago in June 2017 shares were trading at £8.44.

Pearce unveiled Inmarsat’s Q1 numbers last week saying that the year had started well, with strong performance from its growing aircraft division. Overall revenues were up 4.8 percent y-o-y, and revenue guidance for this year was reiterated at $1,300-1,500 million.

He spent time talking about the company’s role in the aviation market. “In Business and General Aviation, we now have around 4,000 aircraft using our SwiftBroadband project… Our L-band based [In-Flight Connectivity] service based on SwiftBroadband grew revenues by 50 per cent. Thanks to increased usage by a number of customers. [The] IFC service now have over 1,300 expected aircraft under signed contracts, including a recent traditions of Citilink, the subsidiary of Garuda airlines and Kuwait Airways, announced by our partners in the last few weeks.”

“And now at last, the first commercial GX IFC services are starting to go live in the coming months, including with Euro Wings, and Austrian from our Deutsche Lufthansa Group contract as well as Qatar Airways, who announced only this week, have started their service rollout to passengers.”

Pearce explained that today’s typical 50-100 Mb/s delivery to aircraft passengers was progressing to 300 Mb/s by the end of 2019, and that trials of the higher speed services were being tested by Qatar, Lufthansa and Singapore Airlines.  “You’ll see some early evidence that we can deliver a really rich strong level of customer experience, even when there are up to 100 people on an aircraft using our services at the same time.”

Equity analysts at investment bank Deutsche Bank are recommending the stock as a ‘Buy’ and give a target share price of £5.75, and saying that 2018 is a year “all about confidence”.


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