Last close As at 05/08/2026
—
— 0.00 (0.00%)
Market capitalisation
—
Research: Industrials
AAC Clyde Space has confirmed the acceleration of the xSPANCION satellite project following completion of the capital raise, which has provided SEK35.9m of net new funds. This will provide liquidity to proceed with the final phase to build out 10 satellites, the first four of which are to be added to AAC’s own SDaaS fleet by the end of 2024. By that time we would expect AAC to be generating positive EBITDA and net cash flow as it continues to grow the high-margin data revenue streams.
Written by
AAC Clyde Space |
xSPANCION commitment confirmed |
Rights issue outcome |
Aerospace and defence |
31 July 2023 |
Share price performance
Business description
Next events
Analysts
AAC Clyde Space AAC Clyde Spaceis a research client of Edison Investment Research Limited |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
AAC Clyde Space has confirmed the acceleration of the xSPANCION satellite project following completion of the capital raise, which has provided SEK35.9m of net new funds. This will provide liquidity to proceed with the final phase to build out 10 satellites, the first four of which are to be added to AAC’s own SDaaS fleet by the end of 2024. By that time we would expect AAC to be generating positive EBITDA and net cash flow as it continues to grow the high-margin data revenue streams.
Year end |
Revenue |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/21 |
180.0 |
(27.0) |
(0.14) |
0.0 |
N/A |
N/A |
12/22 |
196.7 |
(17.7) |
(0.08) |
0.0 |
N/A |
N/A |
12/23e |
355.1 |
0.6 |
0.00 |
0.0 |
N/A |
N/A |
12/24e** |
483.6 |
44.9 |
0.15 |
0.0 |
4.0 |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments. **Pre-rights issue adjustments.
Rights issue outcome
The rights issue was 66% covered with a subscription ratio of 45%, guarantee subscriptions of 19% and non-rights subscriptions of 2%. While take-up of 45% may seem disappointing given the deep discount, we feel that this may reflect investors’ understandable caution towards space investments and the segment’s performance over the last 18 months. With AAC yet to reach positive EBITDA, perceived risk remains high, although modest positive EBITDA is expected this year as higher-margin SDaaS revenues accelerate. The company is set to receive SEK35.9m in new funds for working capital to support growth, replacing the bridge facility that had been utilised while the share offer was undertaken. Liquidity has also been aided by passing the significant Critical Design Review milestone for the Arctic Weather Satellite (AWS) in early July and the receipt of annual R&D tax credits. AAC is supplying some SEK160m of payload and systems content to the AWS under various contracts.
xSPANCION Phase 3B supports SDaaS growth
On 26 July, AAC announced the agreement to move to the final SEK103.4m Phase 3B of the SEK225.6m xSPANCION programme to develop an innovative satellite constellation service. As with the entire project, the final phase is co-funded by the UK Space Agency through the European Space Agency’s Pioneer Partnership Projects. The final phase will see the construction of 10 satellites, the first four of which will be deployed in FY24 within the framework of the contract and used by AAC to support its SDaaS activity. Beyond the contract, the remaining six platforms are to be offered to customers to deploy their own payloads.
Valuation: Significant potential for successful delivery
With no changes to our underlying estimates, our DCF-based fair value stands at SEK6.1/share compared to SEK8.2/share before the rights issue. Management expects positive EBITDA in FY23 as SDaaS revenues accelerate, which we believe should lead to AAC generating self-sustaining positive cash flows from FY24.
Earnings revisions
The effect of the rights issue on our earnings estimates is shown in Exhibit 1 below. As we previously indicated, there is no change to our expectations for the underlying trading performance of the group in either FY23 or FY24. The dilution to EPS is not as severe as it would have been had the issue been fully subscribed, but at 27.9% remains significant. We expect the company to finish the year with adjusted net cash of c SEK64m.
Exhibit 1: AAC Clyde Space earnings adjustments
SEKm |
2023e |
2024e |
||||
|
Prior |
New |
% change |
Prior |
New |
% change |
By business |
|
|
|
|
|
|
Total group net sales |
355.1 |
355.1 |
0.0% |
483.6 |
483.6 |
0.0% |
Other operating income |
7.3 |
7.3 |
3.0 |
3.0 |
||
Own work capitalised |
38.0 |
38.0 |
53.3 |
53.3 |
||
Total group income |
400.4 |
400.4 |
0.0% |
540.0 |
540.0 |
0.0% |
EBITDA (company adjusted) |
21.9 |
21.9 |
0.0% |
71.5 |
71.5 |
0.0% |
EBIT (adjusted) |
(2.5) |
(2.5) |
(0.0%) |
42.8 |
42.8 |
0.0% |
Underlying PBT |
0.6 |
0.6 |
(0.0%) |
44.9 |
44.9 |
(0.0%) |
EPS – underlying continuing (SEK) |
0.00 |
0.00 |
(19.5%) |
0.21 |
0.15 |
(27.9%) |
Adjusted net cash |
25.5 |
63.5 |
149.3% |
61.2 |
99.2 |
62.1% |
Source: Edison Investment Research estimates
Valuation: Dilution but still significant potential
Our capped DCF valuation falls to SEK6.1/share compared to SEK8.2/share before the rights issue and SEK5.3/share had there been full subscription. The WACC applied continues to reflect our assumed cost of equity of 12%. We feel that the capital raise should be sufficient for AAC to move towards a self-financing situation in FY24, which should allow the risk assumption to moderate. Exhibit 2 below provides a sensitivity of the calculated DCF value to both WACC assumptions and terminal growth rates.
Exhibit 2: DCF sensitivity analysis to WACC and terminal growth rate (SEK/share)
Terminal growth rate |
|||||||||
WACC |
7.0% |
8.0% |
9.0% |
10.0% |
11.0% |
12.0% |
13.0% |
14.0% |
15.0% |
0% |
11.8 |
10.1 |
8.7 |
7.7 |
6.8 |
6.1 |
5.5 |
5.0 |
4.6 |
1% |
13.5 |
11.3 |
9.7 |
8.4 |
7.4 |
6.6 |
5.9 |
5.3 |
4.8 |
2% |
16.0 |
13.0 |
10.9 |
9.3 |
8.1 |
7.1 |
6.3 |
5.7 |
5.1 |
3% |
19.7 |
15.4 |
12.5 |
10.5 |
9.0 |
7.8 |
6.9 |
6.1 |
5.5 |
Source: Edison Investment Research estimates
Exhibit 2: Financial summary
SEKm |
2020 |
2021 |
2022 |
2023e |
2024e |
||
Year-end 31 December |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
||
PROFIT & LOSS |
|||||||
Net sales |
|
|
98.4 |
180.0 |
196.7 |
355.1 |
483.6 |
Own work capitalised and other operating income |
21.1 |
30.9 |
52.5 |
45.3 |
56.3 |
||
Group income |
119.5 |
210.8 |
249.2 |
400.4 |
540.0 |
||
EBITDA |
|
|
(17.5) |
(12.4) |
(24.5) |
21.9 |
71.5 |
Operating Profit (before amort. and except). |
(22.2) |
(21.9) |
(34.9) |
8.3 |
56.4 |
||
Intangible Amortisation |
(3.3) |
(0.9) |
(0.7) |
(10.7) |
(13.6) |
||
Exceptionals |
(12.1) |
(15.8) |
(26.0) |
(16.8) |
(16.8) |
||
Other |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Operating Profit |
(37.5) |
(38.6) |
(61.6) |
(19.3) |
26.0 |
||
Net Interest |
(1.3) |
(4.2) |
17.9 |
3.1 |
2.1 |
||
Profit Before Tax (norm) |
|
|
(26.7) |
(27.0) |
(17.7) |
0.6 |
44.9 |
Profit Before Tax (FRS 3) |
|
|
(38.8) |
(42.8) |
(43.7) |
(16.2) |
28.1 |
Tax |
0.5 |
3.3 |
2.6 |
0.8 |
(1.4) |
||
Profit After Tax (norm) |
(26.4) |
(24.9) |
(16.4) |
0.6 |
42.7 |
||
Profit After Tax (FRS 3) |
(38.3) |
(39.5) |
(41.1) |
(15.4) |
26.7 |
||
Average Number of Shares Outstanding (m) |
102.3 |
173.8 |
196.9 |
254.5 |
284.2 |
||
EPS - fully diluted (SEK) |
|
|
(0.26) |
(0.14) |
(0.08) |
0.00 |
0.15 |
EPS - normalised (SEK) |
|
|
(0.26) |
(0.14) |
(0.08) |
0.00 |
0.15 |
EPS - (IFRS) (SEK) |
|
|
(0.37) |
(0.23) |
(0.21) |
(0.06) |
0.09 |
Dividend per share (SEK) |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
EBITDA Margin (%) |
-17.8 |
-6.9 |
-12.5 |
6.2 |
14.8 |
||
Operating Margin (before GW and except.) (%) |
-22.5 |
-12.2 |
-17.7 |
2.3 |
11.7 |
||
BALANCE SHEET |
|||||||
Fixed Assets |
|
|
523.0 |
681.0 |
728.6 |
740.0 |
764.9 |
Intangible Assets |
494.3 |
639.5 |
665.5 |
660.8 |
668.8 |
||
Tangible Assets |
16.2 |
26.4 |
46.4 |
62.8 |
80.2 |
||
Right of use asset |
12.5 |
15.1 |
16.8 |
16.4 |
15.9 |
||
Investments |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Current Assets |
|
|
113.3 |
193.4 |
152.8 |
180.7 |
229.6 |
Stocks |
12.8 |
13.2 |
20.2 |
35.5 |
45.9 |
||
Debtors |
9.5 |
23.0 |
24.5 |
39.1 |
50.5 |
||
Cash |
62.4 |
96.1 |
52.1 |
63.5 |
99.2 |
||
Other |
28.5 |
61.1 |
56.0 |
42.7 |
33.9 |
||
Current Liabilities |
|
|
(56.1) |
(129.2) |
(170.2) |
(198.5) |
(245.1) |
Creditors |
(56.1) |
(128.5) |
(170.2) |
(198.5) |
(245.1) |
||
Short term borrowings |
0.0 |
(0.6) |
0.0 |
0.0 |
0.0 |
||
Long Term Liabilities |
|
|
(14.4) |
(16.6) |
(17.8) |
(18.1) |
(18.6) |
Long term borrowings |
(0.3) |
0.0 |
0.0 |
(0.0) |
0.0 |
||
Lease liabilities |
(12.9) |
(15.1) |
(16.5) |
(17.0) |
(17.4) |
||
Other long term liabilities |
(1.2) |
(1.5) |
(1.2) |
(1.2) |
(1.1) |
||
Net Assets |
|
|
565.8 |
728.6 |
693.5 |
704.2 |
730.9 |
CASH FLOW |
|||||||
Operating Cash Flow |
|
|
(14.6) |
(37.3) |
(14.2) |
17.1 |
100.5 |
Net Interest |
(0.2) |
(0.2) |
19.4 |
4.0 |
3.0 |
||
Tax |
0.4 |
2.1 |
1.3 |
(0.0) |
(2.2) |
||
Capex |
(17.2) |
(29.2) |
(40.9) |
(48.6) |
(66.4) |
||
Acquisitions/disposals |
(6.2) |
2.6 |
(43.7) |
0.9 |
0.9 |
||
Financing |
49.2 |
94.1 |
33.4 |
38.0 |
0.0 |
||
Dividends |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Net Cash Flow |
11.4 |
32.0 |
(44.7) |
11.4 |
35.8 |
||
Opening net debt/(cash) excluding lease liabilities |
(51.6) |
(62.2) |
(95.5) |
(52.1) |
(63.5) |
||
HP finance leases initiated |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Other |
(0.8) |
1.3 |
1.3 |
0.0 |
(0.0) |
||
Closing net debt/(cash) excluding lease liabilities |
(62.2) |
(95.5) |
(52.1) |
(63.5) |
(99.2) |
||
Net financial liabilities including lease liabilities |
(49.3) |
(80.4) |
(35.6) |
(46.5) |
(81.8) |
||
Source: Company reports, Edison Investment Research estimates
|
|
Research: Healthcare
SIGA Technologies announced that the US Department of Health and Human Services has exercised its procurement options for oral and intravenous (IV) TPOXX, worth around $113m and $25m respectively, for the US national stockpile under the BARDA contract. This a key catalyst for SIGA for FY23 as continued US stockpile renewals are core drivers of the company’s business. SIGA aims for the delivery of oral TPOXX in FY23 and the new IV TPOXX order in FY24 (after meeting order obligations for its previous IV TPOXX order exercised in August 2022, worth $26m). We expect the company’s FY23 and FY24 revenues to continue to be driven by replenishing US government stockpiles and supplemented by incremental international orders. The next growth catalyst for SIGA, in our opinion, could be either additional international orders or an update on the next US government contract, including the possibility of a stockpile expansion.