Beam Communications signals continued growth with strong finish to FY 2023

SatCom specialist Beam Communications (ASX: BCC) is celebrating a positive finish to its 2023 financial year on the back of record earnings and a number of new contracts wins in the June quarter.

The mobile satellite solutions and services provider achieved a 75% jump in operating cash inflow to $2.5 million and a 39% cash balance increase to $5 million by the end of the June quarter.

The company’s highly successful June quarter also saw it achieve record levels for sales and royalty increases across all its business units.

Managing director, Michael Capocchi, said Beam recorded another quarter of positive net operating cash flow as its cash holdings increased materially over the previous quarter.

He said the increase in operating cash flow was driven by the further unwinding of trade working capital and lower capex requirements following the successful launch of the Iridium GO! exec device.

Mr Capocchi, noted that while it is not unexpected that the level of cash flows may vary between quarters due to the timing of payments and receipts, current projections are that the company’s trend of positive operating cash flows will continue.

“We ended the financial year on a solid footing and are well positioned to deliver record results for shareholders in FY23. Pleasingly, we continue to be well placed to capitalise on the growth of the global mobile satellite services sector with our range of unique and innovative devices and solutions,” he said.

“Further, we are increasingly upbeat on the expected returns from our ZOLEO Inc. JV, of which Beam owns half, as its performance to date demonstrates the value of Beam’s stake in the JV.”

“We believe Beam’s outlook in the current financial year remains very positive and our strong balance sheet and growing cash flows will give us options to pursue new opportunities for growth over the short- to medium-term.”

With its recent strong earnings run, Beam has entered the second half of calendar year 2023 with total available funds of $6.1 million, which includes $5 million in cash and a further $1.1 million in available and undrawn debt facilities.

Strong operational performance

Mr Capocchi said the impressive results are backed by growth across all of Beam’s businesses.

“The global mobile satellite services sector is expanding strongly, and Beam is well placed to benefit from this bullish trend.”

“Beam Equipment (excluding ZOLEO) sales continued their strong run as they jumped 22.3% QoQ. This growth included, but is not limited to, sales of the recently launched Iridium GO! exec device.”

Beam recently landed a 5-year, $18 million contract to develop and supply a portable satellite hotspot to global satellite leader Iridium Communications. To date it has delivered 40% of the contract and anticipates that it will fulfil 80% of the commitment by the end of FY24.

Beam also recorded strong demand for its wholly owned SatPhone Shop business, which recorded a 53.1% jump in revenue.

Notably, Beam’s total recurring revenue has also grown by 17%. The higher margin recurring revenue combines ZOLEO royalties and the sale of airtime to enterprise, government and consumer clients.