Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
Activist emerges with 5% stake in Satellite Solutions
Satellite broadband and airtime reseller Satellite Solutions Worldwide (SAT:AIM) could face a shake-up as part of an attempt to improve shareholder returns. Activist investor Christopher Mills has emerged on the share register after investing £5m as part of Satellite Solutions’ recent £12m cash call.
Mills has a long track record of shaking up poorly performing smaller businesses through the Harwood Capital firm he founded. Among the more recent examples was his purchase of the old Essenden tenpin bowling company, which has since re-emerged as Ten Entertainment (TEN).
While Harwood Capital was already a significant 19.3% shareholder in Satellite Solutions, according to Reuters data, this new stake has been made through the North Atlantic Smaller Companies (NAS) investment trust that Mills runs. This suggests that Mills hopes to take a more hands-on role in Satellite Solutions’ day-to-day operations and strategy in order to revive the business.
SUPERFAST BROADBAND TO REMOTE REGIONS
Bicester-based Satellite Solutions buys satellite network airtime and bandwidth to supply homes, businesses, broadcasters, construction sites and parts of the military based in rural areas where fibre optic or copper networks fail to reach.
Despite higher broadband penetration and Government-led initiatives to improve broadband accessibility, an estimated 20m European households are thoughts to be unable to access faster broadband speeds than 2Mbps.
Satellite Solutions is actively targeting this market, providing speeds of up to 30Mbps irrespective of location, geography or local network infrastructure. It serves around 121,000 customers across Europe and Australia.
Its expansion plans were bolstered last week through the combined €11m (approximate £9.7m) acquisitions of Open Sky and Satellite Internet Services, allowing the company to set up its first supplier hubs in Italy and Germany.
Satellite Solutions’ shareholders enjoyed early share price success in the year or so directly after the company joined AIM in May 2015 at 4.5p per share. But over the past two years or so the stock has become wedged within a 7p to 9p per share range. Investors have been concerned about the company’s weak cash conversion in recent financial results.
Christopher Mills is likely to work closely with founder, chief executive and 6.5% shareholder Andrew Walwyn towards addressing these concerns and improving operational excellence. Should progress not go as well as hoped it is quite possible that Mills could attempt to buy the company down the line, taking full control of Satellite Solutions’ destiny. (SF)