Avanti Capital Share Discussion Threads

[lodgey1973] 24/2/2005 08:49

Market doesn't seem to impressed

[currypasty] 24/2/2005 07:42

24 February 2005



Avanti Capital Plc, the AIM quoted private equity company,
announces interim results
for the six months ended 31st December 2004.



Highlights

During the period under review, Avanti Capital plc
(excluding the consolidated results of Barvest) made a profit
of #475,000 before exceptional items and warrant cancellation
payment.

Consolidated net assets (excluding negative goodwill) of
#19.5 million or 188p per ordinary share.

Barvest achieved #598,000 EBITDA for 26 weeks to 26th
December 2004.

[lodgey1973] 13/2/2005 23:37

Curry,

What price do you 'foresee' this stock reaching over the next 6 months?

Cheers,
Lodgey.

[lodgey1973] 13/2/2005 12:31

CURRY,

Does that mean that they haven't completed the 'share buybacks'?
What have heard?

Cheers,
Lodgey

[pachandl] 13/2/2005 11:34

Thanks Lodgey - I had not seen that well-researched "buy" recommendation.

[currypasty] 13/2/2005 09:33

watch this space, action on that front soon.

[regalrealm114] 13/2/2005 09:06

Thanks for the link Lodgey going to put them back in the drawer for another year or so.
Yours E.

[lodgey1973] 13/2/2005 06:44

regalrealm114,

You might find this link useful, read the first post.



Cheers,
Lodgey.

[regalrealm114] 12/2/2005 13:42

Looking to sell my 180 shares, don't need the money just looking to tidy up the paper work found them in the drawer forgot that we were ripped of e-capital and Birchin international now the thought of that has just depressed me would be grateful for your opinions, been having a lot of success with GWP of late still got a long way to travel, going for a real ale now,
Cheers E.

Jeffian: Regus have come a long way and still going to my surprise I do believe the Bear Trader is still shorting them.

[lodgey1973] 10/2/2005 22:22

Found this about mBlox (AVA have a holding in this company)

MasterCard™ and mBlox Launch First Global Mobile Fraud Detection Solution

Waterloo, Belgium and London, UK; February 9, 2005 – MasterCard, the leading global payments solutions company, and mBlox, the world's mobile messaging transmission and billing specialist, have announced a worldwide cooperation agreement to integrate mBlox's mobile messaging service with Aristion®, MasterCard's cutting edge fraud prevention tool. This new solution will become the first global fraud detection and alerting system, offering any bank a high quality, ready to use Short Message Service (SMS)-enabled solution. Existing Aristion users can install it in under an hour.

[lodgey1973] 09/2/2005 05:45

YMMD,

If you bought at say 20p then your shares are now worth 3p in the old value

A recent analysis reported that the share price could rise to between 200-220p
However that would still only equate to 3.6p in the old value.

Up to you :)

[ymmd] 08/2/2005 09:53

an unlucky and frankly not too vigilant investor, i bought this stock in the e-capital days at 20+ !! Oh dear! still waiting to pullout. After the 1 to 60p share crush the stock seems to be recovering some ground. Not much from my point of view..but any point in laying it down for another 6-12 months? or sell now..

[lodgey1973] 04/1/2005 11:24

Hello,

Does anyone have any idea when these 'share buybacks' are likely to occur?

Cheers.

[blueblood] 16/12/2004 09:20

Lodgey

Thanks. Glad to see that they still have Video Networks.

[lodgey1973] 15/12/2004 00:56

Hello,

Here is the list of their investments other than Po na na and Mblox

Other Investments
The following investments are also held by the group:

Callserve Communications Ltd
Digital Brain Ltd
Espresso Broadband Ltd
Legion International Ltd
Video Networks Ltd
BAM! Inc (Formerly VIS Interactive plc)
XDL Intervest LP
I-Defense Inc
U Switch Ltd

[growbag] 14/12/2004 12:08

Not sure, but these are good signs "In February 2004 Business Serve was floated on AIM and Avanti sold its stake for 3x book value and in June 2004 Amino Communications was floated at a value of 4x Avanti's book value."

[blueblood] 14/12/2004 09:15

Is there anybody there? Do Avanti still have a stake in Video Networks as they are mentioned in Mail on Sunday as expanding into music downloads etc. I seem to remember it was this particular holding that got so many ECI's excited.

[blueblood] 23/11/2004 14:03

When do the company have to inform shareholders that they have bought back shares and is a RNS required?

Thanks in advance

[langland] 12/11/2004 09:28

Possible but doubt it. I would imagine they would want much higher price. Also they recently increased their holding.

[arthur_lame_stocks] 12/11/2004 09:21

Will Laxey's now start selling their shares to Avanti?

[langland] 12/11/2004 08:06

So they want to close the discount. Suits me....

RNS Number:1440F
Avanti Capital PLC
12 November 2004

Avanti Capital PLC

12th November 2004





Avanti Capital - AGM Statement - Buy-back proposal approved



Avanti Capital Plc (the 'Company'), the AIM quoted private equity company, held
its 2004 Annual General Meeting at 9.30am yesterday.



The Company's shareholders duly passed all of the Resolutions unanimously.



Chairman Philip Crawford commented



"I am delighted that shareholders have approved all of today's resolutions,
especially the reduction of the share premium account and the power given to the
Board to make market purchases of the Company's shares. This ability should help
to significantly reduce the market's discount to perceived net asset value.



Furthermore, I repeat Joint Chief Executive Richard Kleiner's comments of less
than a month ago. The year to end June 2004 proved to be an exciting and
transforming year for the Company. We have started to grow our portfolio of
investments by identifying quality, undervalued assets where we believe our
expertise will create greater shareholder value."





Contact:



Avanti Capital Plc Tel: [phone]

Julian Fellerman, Joint CEO

Richard Kleiner, Joint CEO



Ballard Associates

Louise Ballard Tel: [phone]

Ryszard Bublik



www.avanticap.com





Note to Editors



Avanti Capital is a private equity company that focuses on the quality of
individual investments.



Its approach to investments is both rigorous and discerning and reflects the
fact that it is seeking exceptional opportunities to invest in businesses with
high quality management teams and where Avanti's own management can feel truly
passionate about the business's prospects.



Avanti's investment criteria are as follows:



* European businesses

* Strong management with a proven track record

* Wide ranging businesses, which show the potential for material growth
in the short to medium term, including consumer brands, leisure,
retail and specialist support services

* Undervalued businesses or assets in both the public and private arena

* Where appropriate, the company will seek to raise debt finance to part
fund any investment



The AIM listed Avanti Capital therefore offers shareholders participation in
private equity deals through a quoted vehicle.










This information is provided by RNS
The company news service from the London Stock Exchange
END

AGMUASNRSURAAAA

[langland] 08/11/2004 17:36

I endorse gb's comment. I put a short post on the old thread at the time of the results saying I thought real NAV to be 230/40 so I am comforted by the above calculations which should be proved right over time. I have held these for about a year and have bought more recently. Since this new thread was started, there has been a lot more trading interest in the stock. Let's hope it continues.

[growbag] 08/11/2004 17:12

Great post. Thanks very much for that. Compelling reading.

[mark watsonmitchell] 03/11/2004 18:55

SQC Research recently published a profile on Avanti Capital - which concluded that the shares are undervalued and capable of an early rise in price.

I present below that profile.



Principal activities:
The Company's principal activity is that of a private equity and ancillary services company.

FT Sector: AIM
EPIC Code: AVA
Price: 163p
52 Week Trading: High: 172 .5p Low: 120p
Shares issued: 10,373,592 (ordinary shares of 60p each)
Market Cap: £16.91m
Gearing: Estimated net cash of £14m
Net Asset Value: The current balance sheet asset value is 190p a share
SQC Valuation: SQC Research estimates NAV is 246p per share
Results: Finals - October Interims - March AGM - November
Marketability: 4 mrkt mkrs deal in up to 10,000 shares on a 7p spread
Brokers: Collins Stewart Limited (020 7523 8300)
Company Contact: Richard Kleiner, Joint Chief Executive and Chief Financial Officer, or Julian Fellerman, Joint Chief Executive (020 7070 7070)

CONCLUSION 'A significantly undervalued Private Equity Vehicle'

This Group has grown admirably out of the merger of two cash-rich Internet incubators. It is now gaining an impressive presence in the private equity sector. It operates in the sub £50m market where many of the larger venture capital groups no longer play.

A strong balance sheet allows the Group to move rapidly as opportunities arise. Whilst its tax losses are so substantial that over the next few years many of the gains made will accrue in full.

The current share price is trading at a substantial 34% discount to the SQC Research estimated net asset value of 246p per share. This gap of price-to-value could narrow at market-beating pace as the Group's profile improves.

We consider that the shares could offer even greater upside from higher valuations of its portfolio and use of the £19m worth of tax losses. As the abilities of bosses Fellerman and Kleiner are exposed, further private equity deals will have a substantial impact on the NAV and consequently the share price.

With about £14m of cash and a market cap of £16.9m we reckon that the £12m plus portfolio is in for just £2.9m. Given the current buoyancy of markets in small capitalisation stocks that 246p estimated NAV may well prove conservative. Furthermore we reckon that the effects of any share buy-backs will be instantly beneficial to both the NAV per share and the share price, thereby strengthening the upside potential.

Without hesitation we set a six-month Target Price of 200p.

COMPANY BACKGROUND

Avanti Capital was formed in 2003 as a result of the merger and consequent shutting down of two cash-rich Internet incubators, e-Capital Investments plc and Internet Incubator plc. The management team, Julian Fellerman, Richard Kleiner and Anton Bilton, have a fairly clean canvas upon which to work.

Avanti Capital offers shareholders participation in private equity deals through a quoted vehicle. The initial purchase of the Po Na Na chain for £6m in August 2003 has gone very well with a substantial uplift in value already. The market capitalisation of £16.9m is largely backed by about £14m of cash. SQC Research considers that the other assets are significantly undervalued and are reasonably liquid.


DIRECTORS

Julian Fellerman - Joint Chief Executive

Julian has many years of corporate finance, business advisory and management experience, gained within the environment of legal professional services. He has represented public and private small and medium sized companies, some of which have grown rapidly to become large corporates. He practised law for 14 years, latterly as a partner in Berwin Leighton Paisner. In June 2000, he resigned as a partner in that firm in order to establish Odyssey Partners with Richard Kleiner. In July 2001, Julian joined Avanti as a full time executive director.

Julian holds an honours degree from Queen Mary College University of London and is a Solicitor of the Supreme Court and a member of the Law Society.


Richard Kleiner - Joint Chief Executive and Chief Financial Officer

Richard joined Avanti in July 2001, having established Odyssey Partners with Julian Fellerman the previous year. Richard has significant corporate finance, financial services, accounting and taxation experience, as well as a broad range of investment contacts. Until recently, Richard was the managing partner at Gerald Edelman, Chartered Accountants, where he has been a partner since 1986. Richard has a wealth of corporate finance and business advisory experience gained from over 20 years as a practising accountant, assisting small and medium sized companies from formation to listing on the public markets.

Richard is a Fellow Member of the Institute of Chartered Accountants in England and Wales and is an Associate Member of the Life Assurance Association.


Anton Bilton - Part-Time Executive Director

Anton is founder and Chief Executive of the Raven Group, a private property group which specialises in the conversion of listed buildings and commercial property development and investment. The Raven Group currently has a significant development portfolio. Anton is a part-time Executive Director of Avanti Capital, having been involved with the Company since its inception in 1997.

Anton is an Economics graduate of the City University, London.


Jonathan Poole - Investment Manager

Jonathan joined Avanti in April 2004 having worked extensively with the Company on its acquisition and restructuring of Barvest in 2003. Prior to joining Avanti, Jonathan was recruited by ING Barings to help establish and build their UK growth companies investment banking business where he advised small to mid-sized public and private companies on debt and equity financing, mergers and acquisitions and restructurings. Jonathan began his career with UBS Warburg in the investment banking division where he advised public European companies across a diversity of sectors.

Jonathan is an associate member of the Securities Institute, has a first class honours degree from Durham University and is currently studying for an Executive MBA at London Business School.


In addition, Philip Crawford (Chairman), Adrian Collins and William Crewdson are Non-Executive Directors of Avanti Capital and bring a wealth of investment and senior management experience to the Company across diverse business sectors.


COMPANY ACTIVITIES

Avanti Capital is a private equity company, with a strategy of investing in businesses, using a combination of debt and equity.

The Company has an executive team with extensive experience of investing in and running companies across a wide range of sectors.


THE AVANTI CAPITAL INVESTMENT PORTFOLIO

Avanti Capital's investment approach is as follows:

• principally European businesses and strong management with a proven track record;

• wide ranging businesses, which show the potential for material growth in the short to medium term, including consumer brands, leisure, retail and specialist support services;

• investment opportunities in both public and private companies whose assets are undervalued; and

• where appropriate, the Company will seek to raise debt finance to part fund any investment.

The Group's executive management team has widespread and extensive experience across a range of sectors. This experience enables it to quickly get a real in-depth understanding of investments and to identify those prospects which have the greatest potential for delivering substantial gains for shareholders.

Avanti is able to make quick decisions - and its team makes it a priority in all investment opportunities to be responsive and to establish at an early stage an outline structure and fair value for any proposed deal.


Po Na Na

Po Na Na is the most significant investment made to date. In August 2003 Avanti bought the profitable rump of failed bar group Po Na Na, which when quoted had attained a capitalisation of £50m. The AIM listed operator went into administration on 1st May 2003. It had operated 58 bars and nightclubs at its peak, but had run into financial difficulties earlier in the year.

In a buy-in/buy-out transaction, the Company had provided a facility of up to £7m of acquisition and working capital finance for the buy-out of up to 28 bars and nightclubs selected from the Po Na Na portfolio. The buy-out vehicle, Barvest Limited, was in a position to cherry pick the sites it wanted to acquire, whilst leaving behind the underperforming sites.

The price paid by Barvest Limited was £6m and depended on the number of units assigned. Of this amount, Barvest paid £1m for tangible assets.

The Company supported the management team, which invested £0.9m in the transaction. The Group invested £0.6m cash for 60% of the equity, with the balance being invested by way of a secured preferred loan note bearing a coupon of 37.5% per annum. It was anticipated that at some point a proportion of the note would be refinanced by way of a senior debt facility. That refinancing took place in April 2004 with Barclays Bank Leveraged Finance, which provided a facility of £4.5m.

That transaction fell squarely within the Avanti criteria; the business is profitable at the operating level and has sound growth potential. The added ingredient is that the Company invested at a time when the sector was at a low point and has backed a management team with deep knowledge and experience in the business and the sector.

During the 45-week period to the end of June 2004 the 28 acquired sites generated sales of £19m and an EBITDA of £2m. Based on an annualised EBITDA of between £2.3m and £2.5m the business should, from a cost of £5m, have an enterprise value of up to £15m and Avanti's 60% stake would produce a significant uplift as described in the valuation table on page 5.


mBlox

The second most significant investment in value terms is a stake in mBlox Inc, which is a leading European provider of SMS infrastructure services to the content and applications industry. Its customers use its standard and premium-rate outbound and inbound services to provide information, entertainment and communications services to consumers or enterprise staff.

In June 2003 mBlox entered into a merger with US firm Mobilesys Inc., a leading US provider of SMS services to corporations, creating a financially strong international player from two complementary leading companies. As part of the transaction the combined company raised US$8m to finance planned expansion. The fund-raising round was led by Norwest Venture Partners, and participants included Novus Ventures, Duff Ackerman Goodrich and Bank of America Ventures.

The Group owns 7.7% of the equity of the combined company, which today is considered to be the premier service provider of mobile messaging infrastructure in Europe and the United States.

In June 2004, MBlox Inc. closed a further round of financing, raising US$10m in a Series C preference round. The Group invested US$1m in the round.

At 30th June 2003, the book value of the Group's investment in mBlox was £1.25m, based on a post-money valuation of $28m following the merger with Mobilesys. Following the latest round, the Group's 7.7% stake of the fully-diluted equity has an implied book value of $4.7m (£2.6m). The results do not reflect this uplift in value.

SQC Research considers that the real value of this investment is significantly greater than indicated by the implied value on the last fund-raising.


Other Investments

The Group's portfolio includes a number of legacy investments including: Callserve Communications Ltd; Digital Brain Ltd; Espresso Broadband Ltd; Legion International Ltd; and Uswitch Ltd.

On the realisation front these legacy investments are being sold off when the opportunity arises. In February 2004 Business Serve was floated on AIM and Avanti sold its stake for 3x book value and in June 2004 Amino Communications was floated at a value of 4x Avanti's book value.


SQC RESEARCH ESTIMATE OF PORTFOLIO VALUATION


Asset Value per share
Cash (less liabilities) 136p
Mblox (at cost) 18p
Mblox (SQC uplift) 20p
Po Na Na (cost) 21p
Po Na Na (uplift) 41p
Other investments 6p
Property 4p
Total 246p *

*excludes value of tax losses


FIXED ASSET INVESTMENTS VALUATION POLICY

Fixed asset investments, comprising equity shares and share options, are stated at the lower of cost and valuation and in accordance with the 'Guidelines for the valuation and disclosure of venture capital portfolios' published by the British Venture Capital Association on the following basis:

(a) Early stage investments: these are investments in immature companies, including seed, start-up and early stage investments. Such investments are valued at cost less any provision considered necessary, until no longer viewed as early stage or unless a significant transaction involving an independent third party at arm's length, values the investment at a materially different value;

(b) Development stage investments: such investments are in mature companies having a maintainable trend of sustainable profits and from which an exit, by way of flotation or trade sale, can be reasonably foreseen. An investment of this stage is periodically revalued by reference to open market value. Valuation will usually be by one of four methods as indicated below:

• At cost for at least one period unless such a basis is unsustainable;

• On a third party basis based on the price at which a subsequent issue of capital is made involving a significant investment by a new investor;

• On an earnings basis, but not until at least a period since the investment was made, by applying a discounted price/earnings ratio to profit after taxation, either before or after interest; or

• On a net asset basis, again applying a discount to reflect the illiquidity of the investment.

(c) Quoted investments: such investments are valued using the quoted market price, discounted if the shares are subject to any particular restrictions or are significant in relation to the issued share capital of a small quoted company;

(d) Share options are subject to vesting and other conditions set out in the various option agreements. The valuation is based on the intrinsic value of all share options that have vested. This is the difference between the market value of shares at the balance sheet date and the exercise price.

A review of permanent diminution in value is undertaken by reference to funding, investment or offers in progress after the balance sheet date. No adjustment is made for any uplift in value after the balance sheet date.


CAPITAL RESTRUCTURING

Shareholder Structure

In October 2003 the Company carried out a 1 for 60 share consolidation resulting in the number of shares in issue being reduced from 620,367,657 to 10,339,460.

In order to reduce the heavy financial burden of maintaining the share register of in excess of 16,000 members, the Company in December 2003 carried out a further share reorganisation resulting in a reduction in the numbers of members to about 2,600.

Institutional holdings now account for around 35% of the share capital with Laxey Partners, Gartmore, Jupiter, ING Barings and Aberdeen being notable names. Growth in the institutional element of the shareholder base is likely to continue.


Warrants

In June 2004 the Company made an offer for the outstanding warrants which were exercisable at 105p. Under the offer warrant holders were given the opportunity to surrender all warrants held in return for a cash payment of 50p for each warrant.

The warrant offer was 100% successful and there are now no warrants outstanding.

Given, at the time of the offer, the warrants were substantially 'in the money', both in terms of share price and net asset value, the warrant cancellation has produced a material benefit to the existing shareholders in terms of net asset value per share. The benefit to shareholders is demonstrated by comparing what the fully diluted net asset value of each share would have been had the warrants been exercised, 175p, compared with net asset value of each share as at 30th June 2004 of 190p after the warrant surrender.
Share Buy-Back Programme

At the forthcoming AGM (11th November), subject to the usual Court approval, the Company will be seeking shareholder approval to eliminate the deficit in reserves and to authorise the Company to 'buy-back' its own shares.

The impact of such a 'buy-back' programme, if it was enacted, would be to increase the NAV per share.


LATEST RESULTS (Finals – 19th October 2004)

The results for the year ended 30th June 2004 reported a profit of £716,000 (2003: £450,000) before exceptional items and excluding the Barvest consolidation.

The loss for the year before taxation of the group amounted to £671,000 (2003 - profit £47,000) and the loss for the year after taxation and minority interest of the group amounted to £912,000 (2003 - profit £47,000) which was equivalent to a loss of 8.79p per share (2003 – profit of 0.001 per share) and the net assets of the group, excluding minority interests, were £18.6m (2003 - £19.5m).

Net assets ended the year at £19.8m (excluding negative goodwill), following the cash cancellation of all outstanding warrants avoiding the possibility of substantial dilution from 'in-the-money' warrants, which was worth 190p per share.

During the last year the Group made its first private equity investment in backing the buyout of the Po Na Na bars and clubs (Barvest). These results reported that Barvest enjoyed an impressive turnover of £18.9m and EBITDA of £2m for the first 45 weeks of trading since the acquisition of the Po Na Na bars and clubs. The Barvest profit before tax for that period was £0.4m.

The other main investment in the Group's portfolio gained a useful uplift in value following the US$10m fundraising for mBlox Inc, which saw additional investment by the Group of US$1m.

Two exits from the legacy portfolio helped the Company to show a profit on the disposal of investments during the year of £432,000.

The Company has taken the costs of its much needed restructuring in this reported trading period. The exceptionals concerned the capital restructuring (as detailed above), costing some £1.5m, and the write-down of the legacy portfolio of about £400,000.

At the November 2004 AGM the Board will seek authority to purchase its own shares up to a maximum 10% of the current issued ordinary share capital and at certain minimum and maximum prices.

Following all of the restructuring of the Company's share structure it is impressive to see the continued strengthening of its institutional shareholder base.

Richard Kleiner, Joint CEO, commented upon the results,
"This has been an exciting and transforming year for Avanti Capital. We have started to grow our portfolio of investments by identifying quality, undervalued assets where we believe our expertise will create greater shareholder value."



FINANCES

Avanti is well positioned for opportunistic deals given its cash resources and is actively seeking further deals. As at 30th June 2004 the stated net cash was £14.1m.

The Group has tax losses of some £19.7m that are available indefinitely for offset against future taxable gains on investments made by the Group.


SHAREHOLDERS

The Company now has some 2,600 shareholders. There are 10,373,592 ordinary shares of 60p each in issue.

The Board together with family and friends hold in excess of 15% of the equity, whilst institutional holders control in excess of 35% of the share capital.

Major Shareholders (as at 19th October 2004):
Laxey Partners Ltd holds 2,105,780 shares, representing 20.37% of the equity; P J Crawford (Dir), holds 315,000 shares (3.04%); R H Kleiner (Dir), holds 216,720 shares (2.10%); and J M Fellerman (Dir), holds 189,000 shares (1.82%).


OBJECTIVES AND STRATEGY

The transformation of the business model of the Group is now complete. The Group is established as a private equity business, with a strategy of accepting corporate finance mandates, which do not detract from the Group's principal focus.