@Strawman, I think you’ve mixed Beam communications up with Beamtree.

The MD of beam communications is Michael Cappochi, it could be good to get him for an interview though, as the business is a bit tricky to get your head around all the seperate bits. He is pretty receptive to emails.

ugh... yes, yes I have

Still, good result!! Will email Michael now

Beam Communications looks interesting @Slideup. They’ve had a choppy earnings history. Do you think the earnings will continue to climb from here? This year ROE will be c.10% and their PB is 1. It doesn’t look expensive if they can sustain earnings growth from here.

Source: Simply Wall Street

Source: Commsec

Disc: not held

@Rick I think they will increase their profit steadily from here for a couple of reasons. Firstly they are now coming out of a period of relatively heavy investment in product development and inventory build. The first solid signal of this came in the current quarterly. In the last 3 years they have brought two new products to market- Zoleo and Iridium Go Exec.

Iridium Go Exec launched this year and has sold very well since the launch. They had a 5 yr $AUS20M minimum order contract from Iridium for this product, of which 40% has already been delivered this year and they will deliver 80% by year end 2024. If we compare this to the original Iridium GO then continued sales orders can be expected. The original Iridium Go (9 yrs old) had 5000 unit initial minimum order contract and it has greatly exceeded these numbers with >67,000 sold to date and is still relevant in the market and selling well. Earlier ths year they recieved another order ($US1.6M) for delivery in 2024. The slow obsolescence of the sat phone market hardware is overlooked in terms of Beams competitive niche. I think this hardware sales component provides Beam with a very solid foundation to maintain and slowly expand the existent profit level. But this is lumpy revenue and has been their history up/down NPAT.

The profit growth potential I think comes from the Zoleo product and the reoccurring subscription that it is creating. As user numbers grow this will become an increasingly large proporption of the total revenue. Zoleo has sold really well in the North America market, but the way the joint venture with Roadpost works is that Beam only get 15% of this (15% to JV entity and 70% to roadpost) units sold in ANZ are the inverse. ANZ uptake has been relatively slow in comparison, partly due to being launched during the covid lockdowns. The Zoleo units are sold at low margin so the active user numbers are the important metric. They have also recently launched Zoleo in Europe (50% share to Beam) (UK andScandinavia), the JV accrues these costs but over the next few years I am expecting JV costs to decrease as a % of the total revenue and the divident payments from the JV will contribute to Beams profit growth in addition to recieving the higher margin ANZ revenue. This will also be steady revenue so should smooth out the lumpy hardware sales.

I don't think this will be a rapid grower compared to some of the more exciting rocket microcaps, but I think it is a solid well managed business serving a niche that they understand well. They have a symbiotic relationship with iridium that provides them a good barrier to entry from competitors. They are aware of dilution effects and do not raise captial often, so I am expecting ROI to increase as a function of profit increasing.

Thanks for your overview @Slideup. You’ve piqued my interest. I’ve added BCC to my watch list while I do some more research. Cheers Rick