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A beam of light

Tim Boreham
Friday, June 07, 2019

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Formerly known as WorldReach and best known for owning the SatPhone Shop retail chain, Beam Communications (BCC) 29 cents, the designer and manufacturer of satellite telco devices bears a lowly $14 million market valuation - below the company’s expected current-year revenues.

“We’re an all-Australian public company that develops world-first tech products that no-one’s ever heard of,” CEO Michael Capocchi says.

Beam actually is well-known in the telco sector for its “narrow band” mobile satellite devices that fill in the gaps where coverage is not otherwise available. Beam’s partners (or clients) include Telstra and the world’s biggest satellite operators:   Iridium, Inmarsat, Thuraya and Japan’s KDDI.

One of Beam’s best-known products is Iridium Go!, a mobile-based satellite phone developed for Iridium, a Virginia-based global satellite company.

Of course, sat-phones have been around for years.  “But going outside with a big chunky satellite phone was not the easiest way to make a call, so we developed a wi-fi hotspot,” Capocchi says.

“So long as (the device) can see the sky, you can open up the app on your Iphone and receive telephone calls or send Facebook or Twitter upgrades anywhere on earth.”

More helpfully for humanity, there’s now no reason why hikers or boaters – or fully laden aircraft – should stay lost for long. Avid adventure seekers can buy a device for around $US700, acquire it under a mobile-plan style arrangement or rent for the weekend.

As with satellites, costs are quickly reducing. A key advantage is that unlike with one-way SOS signals, the two-way communication means emergency responders can assess whether the incident is a genuine crisis or the equivalent of the Uber Eats delivery guy being late.

You would be surprised what some folk consider to be an emergency …

In September last year Beam launched Thuraya WE, an internet connectivity tool for grey nomads.

 “It’s like being connected to wi-fi at home,” Capocchi says. “You won’t be able to have six people watching Netflix at the same time, but you can watch YouTube or download a video.

“Think early days of ADSL (dial-up internet) with speeds of around 250 megabits per second.”

After a torrid two years Beam has also rediscovered a key corporate attribute – black ink — en route to what management promises is “sustained profitability”.

Beam’s December (first) half revenue more than doubled to $10.5 million, with the net profit of $732,000 a turnaround on the previous $580,000 loss.

The March quarter generated receipts of $4.69 million and a $448,000 surplus.

A handy addition to the Beam board is David Stewart - not the former Eurythmics guy but the ex-CEO of the ASX-listed Netcomm (subject to takeover offer from the Nasdaq-listed Casa Systems).

No word yet on whether there’s room around the table for Netcomm chair Justin Milne, who has space in his diary after being jettisoned from the ABC board last year.

tim@independentresearch.com.au

Disclaimer: The companies covered in this article (unless disclosed) are not current clients of Independent Investment Research (IIR). Under no circumstances have there been any inducements or like made by the company mentioned to either IIR or the author. The views here are independent and have no nexus to IIR’s core research offering. The views here are not recommendations and should not be considered as general advice in terms of stock recommendations in the ordinary sense.

Published: Friday, June 07, 2019


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