Global Invacom says Brexit not all bad for its business

(ShareCast News) - Satellite technology firm Global Invacom issued an update to its investors on Tuesday, over the potential ramifications of the UK leaving the EU.The AIM-traded firm said the UK's impending departure from the EU, with negotiations expected to commence in the fourth quarter of the calendar year, has resulted in economic uncertainty.Its directors, however, said they believe the immediate impact on the group's satellite communications will "not be significant".Global Invacom's board said the weakening of sterling following the results of the vote is expected to have a favourable foreign exchange impact on the group's financial performance in the near to medium term."The group incurs a significant portion of its operational and research and development costs denominated in sterling for activities carried out of its UK facilities, and buys some raw materials such as steel and components in US dollars," it said in a statement."However, as almost all its revenue for satellite communications equipment is denominated in US dollars, the weakening of the pound against the dollar will offer some foreign exchange advantages in the near term."Global Invacom said that, depending on the outcome of trade negotiations between the UK and the EU following the formal exit, the group may consider establishing a logistics hub in an EU country so that it can continue tariff-free transactions via a possible UK-EU free trade agreement."While the UK may experience an economic slowdown following the referendum, historical trends have shown that consumption of satellite-streamed content and data increases during such recessions," the board explained."Such a development, with more audiences staying home for longer periods of time consuming media entertainment, could benefit [our] major UK client Sky."Global Invacom supplies Sky with satellite dishes and circuit boards for set top boxes.