Avanti Communications Share Discussion Threads

[wilksey1] 28/8/2015 13:08

nice rise today not sure whats caused it but lets have some more please.

[sg31] 26/8/2015 11:16

10% coupon on the bond is a bit steep with interest rates where they are.

We need them to start delivering. Lots of potential but they need to turn that into returns for investors.

[gekks] 26/8/2015 08:09

Surely its a massive vote of confidence - doing the due diligence to raise funds for AVN and then taking a stake in over 10% of the company ?

[chriscallen] 26/8/2015 07:37

Yes, of course, you are right sales are critical from the first moment capacity is available. But when it's a new technical, complicated venture my experience is that costs most often come earlier and higher and sales are lower and delayed. I an only sympathise with you and other earlier investors. The only crumb of comfort I can offer is that the target rate is now US$2000 per MHz which the say they have been achieving.

I am hoping that there will be some good news in the run up to the publication of the 2015 results in about 3 weeks. I see MAST have increased their holdings (RNS today) but I'm not reading too much into this as it is presumably linked to the finalisaton of the H4 finance - still if they took shares in lieu of fees it helps with the cashflow and shows they have confidence having seen the internal forward forecasts (which we won't ever have access to).

[jeffian] 25/8/2015 23:43

chris,
Whatever they say now, filling capacity has always been the main task. This from a brokers note of 23 July 2010 (commissioned by Avanti themselves, so presumably with company guidance on the figures) -
"Our modelling of the company’s satellites assumes first year of operation capacity utilisation of 30%, ramping up to 90% from the third year on the smaller (3,000 MegaHertz capacity) Hylas 1 satellite and from the sixth year on the expected larger Hylas 2 and 3 satellites (8,280 MHz capacity). We have assumed leasing rates of £1,500 per MHz per month across the satellites’ 15 year design lives."

I bought on the back of the H1 launch and, frankly, we're still way off the pace. If they fill the sats, the figures look good but that was always so and the issue is about execution and delivery.

[chriscallen] 25/8/2015 17:43

I think part of the problem is the past history that clouds everything. This interview for example would have been published on most companies investor relations page but in the case of AVN you'll look for it in vain. As a relatively recent investor (2+ years)I don't have the back history but I do trust the current chairman who will not want his reputation to be sullied. So the company is becoming more reticent and more fact based.

So they say that the current satellites are 15 - 20% utilised and I believe them. They say that the forward Capex, including Hylas 4, is now fully in place and I believe them.

The big issue is how fast they can fill up the utilisation gap. If the on-going clients are expanding at 50% p.a., which is quite modest given the growth of the African market forecast by external sources to AVN, then getting to full utilisation by 2017/18 is quite a big ask but not impossible if they lift more large clients as well. At that level I would expect turnover to be around US$450M without any contribution from Hylas 4. That beast will push turnover well over US$1Billion once fully utilised and the company will be awash with cash to finance H5, H6 etc (and not at 10% like the current fleet).

The CEO is right to say that filling the capacity is now the main task. They have either got the capacity already or they have the finance in place to get it. So getting customers at $2K per MHz is the beginning, middle and end of management's focus for the next 2 or 3 years. If they succeed we as shareholders will be very adequately rewarded for our patience.

[the wolf of wall street] 25/8/2015 17:31

Looks like 200p support holding, thank goodness.

[sg31] 25/8/2015 17:25

I agree, they should have redoubled sales efforts 5 years ago.

Anyone in this industry should be focused on sales. It's probably just a journalistic sound bite but it is annoying.

[nugacity] 25/8/2015 17:24

redoubling is surely possible whatever level you are at?

Unless you are a pyramid seller?

[jeffian] 25/8/2015 14:48

I can see what the article is saying, chris, but to those of us who've been around a long time, it's an interesting 'spin'. Satellites have a limited life, so why would one not try to pre-sell as much as you can? Also, AVN are behind their original targets of when the earlier satellites would be filled. Just being a bit sarcastic, really, about the 'focus on sales' as we now approach 5 years since H1 launched!

[chriscallen] 25/8/2015 13:59

I think what the article is saying is that AVN does not sell what it doesn't actually have. Othes sell in advance of launch.nThe implication of what is said is that by the launch of H4, H1 & H2 will be sold out. If as of Q3 2015 H1 H2 and Artemis are 20% sold out (top end of 15 - 20 %)then by the beginning of 2017 the management are looking at sales of US$ 405m - 450m from the existing fleet.

[jeffian] 25/8/2015 12:35

"British satellite operator Avanti, having finished the financing for its latest satellite, now plans to redouble its focus on sales and marketing for satellite services throughout Europe, the Middle East and Africa (EMEA)."

I had rather hoped they were doing that already!

[chriscallen] 25/8/2015 10:12

Saw this link on AimSoiree to an interesting article:
hxxp://www.satellitetoday.com/telecom/2015/08/24/with-financing-complete-avanti-shifts-focus-to-filling-satellites/

[garymott] 23/8/2015 21:24

Avanti boldly goes further in satellite race

Bond placing will help realise ambition to complete high-speed internet coverage



"....While this is a UK-led venture, the actual money has come from across the pond: the bonds were placed with MAST Capital Management, a Boston-based fixed income investor, whose backers include private equity specialists KKR. MAST has also upped its equity stake in Avanti to a little over 10 per cent...."

I'm sure MAST Capital Management and KKR have done their homework!!

[jeffian] 18/8/2015 16:27

All in all, it's got to be a positive for AVN and a sign of confidence in the future, but I have to say I wince at the 10% coupon on this bond. If Wasps rugby club and Paragon buy-to-let financiers can attract bond subscribers at around 6%, do we really need to pay this much?

[phillis] 18/8/2015 16:14

confident of selling capacity it seems

[aishah] 18/8/2015 07:13

Completion of Hylas4 Satellite financing

[daicaprice] 18/8/2015 07:08

Looks like a blue day guys.

DC

[stevej2377] 17/8/2015 23:34

On sky News apphttp://news.sky.com/story/1537274/satellite-firm-avanti-fuelled-by-80m-deal

[connor23] 17/8/2015 21:48

Interesting Kleinman scoop re a bond issue here. Might have to revisit this one if confidence returning.

[aishah] 17/8/2015 10:51

Results 16th September. "Continue to buy" says Techinvest in latest issue

[rocketblast] 17/8/2015 10:44

The price was well above £3 and can move very fast - down , did you see programme on near misses due to junk in space and how it will impact satellite launches and no doubt cost for the next generation of satellite. Also revenue looks week so will they ever make a profit and for takeover who wants it.....satellites not compatible with next gen from competitors. Chinese and Russians.....perhaps the middle east may want a token satellite service so the could be taken over.....

Not worth a punt in my view.......

[stavros28] 14/8/2015 21:15

yes still on a buy signal.

Stavros

[sg31] 14/8/2015 17:26

halfpenny, wow, that was a quick bit of research. No doubt it was exceedingly thorough.

I will sell first thing Monday....or perhaps not.

Thank you for your valuable input.

[jeffian] 14/8/2015 16:50

I smell a rat.