Launch Delay

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Company Profile

Established in 1985 as Global Communications, the firm changed her name to Global Invacom Ltd after merging with Invacom in 2008. Post management buyout, the firm was listed in SGX in 2012 through RTO of Radiance Group. 

Global Invacom develop and manufacture satellite ground equipment for the Communication, Healthcare and Defence industries.

Market segment served are:

• Direct-to-Home (DTH) 

• Data-over-Satellite (DOS) 

Major clients includes: Sky Group, Dish Network, Hughes Network Systems, Viasat and Gilat Satellite Networks. 

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Strategy

The company grew mainly through mergers and acquisitions. Some of the names include ProVision, Waveguide Solutions, Raven Mfg, Foxcom, Satellite Acquisition Corp., Skyware Technologies and most recently Apexsat.

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Data-over-Satellite is the firm focus area to grow her business moving forward. 

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Financial  (FY December)

Revenue through the years had been choppy given the niche nature of the business. From FY17, sales appear to be on a growth trajectory only to be impaired by the global pandemic when sales fell 23%.  

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North America and Europe remain the largest market for the company and is likely to be so for the foreseeable future. 

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By the end of 1H20, Global Invacom successfully shifted 45% of her production capacity to a third party sub-contractor in Philippines resulting in improvement in gross margin and return to profitability.

United States constitute 45% of the production with remaining 10% under Rest-of-World. 

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The years of growth through M&A have also raised expenses from about 7% - 8% revenue to 20% - 27% which depresses the earning power of the business. 

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2020

Global pandemic have gravely disrupted supply chain and catalyst towards e-commerce and digital economies have led to shortages of semiconductors and capacitors. As a result, the company is expected to post losses for 1H21. 

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Opinion

Disruption from pandemic aside; Global Invacom business fundamental appear to have strengthened with the shift of production to Philippines. The economic benefit was immediately visible in her gross margin. 

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Success in growing DOS segment of the business boils down to execution. Despite supply chain disruption masking development in this area; it could be a segment that sustain the company growth ambition. 

This must be accompanied by a relentless drive to sustainably lower expenses over the medium term. 

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