Amos Lasker joined Gilat Satcom as chief executive and chairman in February. He has now outlined a new strategy for the self-styled ‘telecommunications operator specialising in the developing world’, which joined AIM with a £4.6m funding at 120p last summer.

To drive growth, Lasker has reaffirmed the focus on providing internet connectivity, bandwidth and telecommunications services within developing nations. The emphasis will be on improving sales and increasing service capability, building on the group’s satellite networks and engineering expertise. An early success was the new contract with telecommunications provider Telkom Kenya, to which Gilat Satcom is now the main provider of broadband connectivity.

Gilat Satcom, which enjoyed a record 2005, with profits powering up 136% to $3.4m (£1.88m), on revenues lifted 23% to $35.2m, recently issued a first quarter update showing improved revenues of $8.05m, against $5.2m, although a hike in sales and marketing spending hit profits, which has perhaps weighed on the shares.

Yet on the satellite side of the business, Gilat is benefiting from Government action to provide internet access to rural Africa, where there are no fibre optic based internet capabilities. The company is looking to extend its offering to include this type of broadband service giving the dual capacity of satellite and fibre services, increasing reliability for customers who are able to switch between the two.

The group also continues to enjoy strong demand for Internet capacity from Africa, driven by Government initiatives to take internet access into schools and encourage computer classes.

For 2006, analysts are forecasting profits of $4.8m and earnings of 12.8p a share, placing the shares on a decidedly cheap prospective p/e ratio of 8.5. Gilat looks one to watch. Speculative buy.

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