BATM Advanced Communications – trading on 100 times historic earnings but quickly advancing to just 15 times, shares 14.90p, £65m mkt cap, $27m cash/investments

18.08.2025

This morning BATM (LON:BVC), the global provider of advanced telecommunication network infrastructure, cybersecurity and medical diagnostic technologies, has announced its Interim Results for the six months to end-June.

In early May this year the group announced the launch of its new brand identity, marking a significant milestone in BATM's journey, as it aligns more closely with its strategic vision to focus on its core strengths in networks, cybersecurity and diagnostics while divesting of its non-core assets.

Less than a month ago, on Thursday 24^th July, the £65m-capitalised group revealed that it had sold off three of its non-core businesses, as it continued to execute its strategy to exit its non-core activities and enabling it to drive its focus on its core strengths of networks, cyber and diagnostics.

At that time CEO Moti Nagar stated that:

"During the first six months of 2025, we have worked diligently to secure the sale of three of our non-core businesses, alongside taking action to drive growth in our core activities.

This is a key part of our strategy to become a focused business comprising BATM Networks, BATM Cyber and BATM Diagnostics.

We are continuing to pursue further disposals as well as M&A opportunities that will enable us to accelerate growth in our core divisions.

We look forward to updating the market on our progress in due course."

Management Comment

Along with this morning’s Interims CEO Moti Nagar stated that:

"This has been an excellent six months of progress towards our strategic goals.

The action that we took last year is beginning to deliver results, with a return to growth in BATM Networks and for our proprietary products in BATM Diagnostics as well as an improvement in gross margin in all of our core divisions.

We achieved a major milestone in BATM Cyber with the delivery of our first encryption platform for the commercial markets.

At the same time, we continued to execute on our strategy to become a more focused business with the sale of three non-core activities during the period. Accordingly, we exited the first half of 2025 in a much stronger position than when we entered.

With positive momentum having continued into the second half, we are on track to deliver year-on-year growth for the full year."

The Business

Established in 1992, BATM is headquartered in Israel with offices in North America, Europe and the Far East, its disruptive, transformative technology is backed by strong intellectual property and patents, which is the foundation for the development of BATM’s market-leading, innovative and cost-effective solutions.

BATM now has its key businesses under a unified brand identity, with its operations structured under the three divisions of BATM Networks, BATM Cyber and BATM Diagnostics.  

The Network business empowers service providers to go beyond connectivity and accelerate digital transformation for their business customers, with cost-effective edge-to-cloud solutions, and carrier-grade network edge demarcation and aggregation platforms.

Its Cyber encryption product secures critical data-in-transit for mission-critical applications with advanced Carrier Ethernet L2 encryption, powered by Post-Quantum Cryptography & Quantum Key Distribution, delivering cutting-edge protection for enterprises and critical infrastructures worldwide.

The Diagnostics division is focused on the development, manufacturing, and marketing of diagnostic laboratory equipment and services, with a core emphasis on molecular diagnostics and infectious diseases.

The Equity

There are some 436.53m shares in issue.

The larger holders include Canaccord Genuity Wealth (3.63%), Richard Griffiths (2.99%), while professional holders also include Oberon Investments, Migdal Mutual Funds, KSM Mutual Funds, Barometer Investment House, Psagot Mutual Funds and IBI Mutual Funds Management.

Analyst Opinion

Upon this morning’s results analyst Robin Speakman, at Shore Capital Markets, stated that the H1 period had seen pleasing progress of the company’s plans, especially with margin improvements in each of its core businesses.

He is now looking for the current year to end-December to report revenues of $125.0m ($117.3m), with adjusted pre-tax profits of $3.0m ($1.4m), more than doubling earnings to 0.5c (0.2c) per share.

For the 2026 year, he estimates $135.0m revenues to almost double its profits to $5.8m, worth 0.9c per share in earnings.

As for the 2027 year, his estimates are for $151.9m revenues, $8.8m profits, and 1.3c earnings per share.

In My View

In early September last year, this group’s shares were trading up to 22p, by April this year they were down to just 12.50p.

Now at 14.90p, they are trading on almost 100 times historic earnings, whilst the strategic operations now underway could help them come quickly down to a mere 15.2 times by 2027.

A very interesting situation that investors could benefit from as they watch closely the ongoing machinations.