Rise of airplane internet lifts tech leader by 8pc
A BOOM in airplane broadband sales sent shares in one of Britain’s biggest technology companies flying.
Satellite communication firm
Inmarsat reported a 4.8pc increase in revenue to £254m in the first three months of the year, boosted by a 39pc increase in the division that supplies wifi to planes.
The success of its aviation division pushed pre-tax profits up to £41.2m in the first quarter, up from £960,000 in the same period of 2017. The announcement is a major boost to Britain’s technology sector following a cooling of investor sentiment that wiped billions off share prices.
Rupert Pearce, chief executive, said: ‘ Given our track record, unique capabilities, differentiated market position and strong channels to market, we are increasingly well placed to deliver further annual revenue growth across all of our target markets.’ Shares flew 8.1pc, or 29.4p, higher to 391.2p.
The FTSE 100 ended the day up 0.3pc, or 22.84 points, at 7543.2, while the FTSE 250 rose 0.8pc, or 157.95 points, to 20,506.27.
Sage, Britain’s largest software firm, has fired 30 senior executives following a sharp fall in profits.
The accountancy software giant reported a 7.1pc increase in revenues but a 5pc fall in profits in the six months to March 31.
In recent years the firm has had to contend with increasing competition from the likes of Salesforce and Netsuite.
Shares actually rose – 0.2pc, or 1p, to 637.4p – reflecting investor relief that the company is trying to address its problems, says Russ Mould of broker AJ Bell.
‘The company has run into problems as it attempts to convert its small business customers to subscriptionbased services to improve revenue visibility,’ said Mould. ‘This is a laudable aim, but the disappointing outcome shows the risk of a company shifting its sales strategy.’
IWG, the serviced office provider, was the FTSE 250’s biggest faller after weak revenue growth and a slump in cash generation.
Currency headwinds meant it grew revenues by just 0.6pc in the three months ending March 31, while it generated £9.5m in cash, down from £23.7m a year earlier. Shares fell 4.1pc, or 10p, to 234p.
Indivior, the FTSE 250-listed anti- addiction drug maker, reported a 6pc slump in revenue and 11pc hit to operating profits in the first three months of the year. It was knocked by a loss of market share in the US for an opioid addiction treatment which has come under pressure from generic copycats. Shares dipped 1.3pc, or 6p, to 455p.
In the small caps, broker RBC Capital Partners downgraded
Nostrum Oil & Gas from ‘outperform’ to ‘ perform’ after a disappointing update in which the firm said water had disrupted production in two wells. It also cut the oil company’s target price from 415p to 395p. Shares fell 4.9pc, or 14.5p, to 282p.
On Aim, shares in Photon Star crashed as it raised £450,000 from investors for a next-generation wireless lighting system. Shares tanked 20.8pc, or 0.1p, to 0.4p. A revenue warning hit shares in
Hydrodec, a clean-technology oil refining company. It expects to make £2.6m in the year to March 31, down from £3.3m the previous year, due to lower sales. Shares slid 15.9pc, or 0.28p, to 1.45p. Personal care product maker
Innova Derma popped after it launched a premature ejaculation device in the US and Australia. It is also seeking regulatory approval to launch in the UK and Europe later this year. Shares shot up 10.7pc, or 16p, to 165p. Shares in Springfield Properties, the Scottish builder, leapt 8pc, or 10p, to 134p after a £20.1m deal to buy rival Dawn Homes.