Avanti Capital Share Discussion Threads

[jeffian] 05/3/2006 13:39

I was away up to my neck in powder snow when the results came out, but can't say I'm surprised. A_L_S; you get my point. LBO; like Cleopatra, you are in de-Nile, mate (at least as far as Barvest is concerned)! The damage ain't over yet. It still has the ability to blow a hole in the balance sheet (it claims fixed assets of £6m of which 4.5m is 'goodwill'(!) and 1.5m tangible assets (for which I read tacky fittings long past their replacement date)) so we'll take that as £0, then; it's barely breaking even at EBITDA level and is likely to need both capital and working cash injections. Even then, with the USP of late-night 'venues' blown out of the water by the new licensing laws, and massive competition, there is no guarantee that PoNaNa can succeed.

If mblox and their 'tech' investments have the potential to do well, AVA need to bite the bullet on Barvest and put it out of its misery IMHO. Staggering on like this without any certainty that they can stop the losses or find a buyer just prolongs the agony and, presumably, takes a disproportionate amount of management time away from more successful investments. The old investors' adage of "run winners, cut losers" should be applied by management here.

Regards, Ian

[ynotna] 05/3/2006 10:21

Financial Mail on Sunday today ..... full page article on mBlox. To date mBlox has been very secretive about it's busines but is now talking about floating - possibly within the next year. Very positive and potentially fantastic news for AVA

[growbag] 02/3/2006 14:06

Note that the current share price factors in no value per share for Barvest. Probably a good thing if it is going under. The story at MBlox is encouraging though - the reduction in cash less so. I can remember when they had £20m odd in cash on the books -- now under £9m. Even discounting Barvest, the shares look under priced at these levels. Dividend next year could be on the cards.

[arthur_lame_stocks] 02/3/2006 12:01

Definitely hats off to Jeffian on this. I´ve just had a better look at Avanti´s results and there are some horrors in there that I didn´t see at first.

Firstly cash went down from 11.106m to 8.884m. This can´t be explained by share buy backs and new invesmtents in the period.

Barvest´s investment value has risen from 3.372m to 5.98m whilst the equity stake has dropped from 81.7% to 60%.

Bank loans have dropped from 4.5m to 1.677m and we now have shareholder loans of 5.179m. I presume this also includes the loan notes.

Anyway the upshot of this is it appears to me that Avanti have been forced to finance Barvest to stop it going under.

What annoys me is that they haven´t bothered to point this out to shareholders so we have to go and work it out for ourselves.

I guess Kleiner and Fellerman don´t want to see Barvest go under since it was their major investment and it´s obviously proven a dog. It´s losing money and they can´t sell it.

You were right Jeffian , they got themselves involved in something they didn´t understand at the top of the cycle and now it´s eating up cash but their ego´s prevent them from admitting they were wrong.

They say this about themselves:

"Avanti's 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."

[hugepants] 01/3/2006 18:13

Credit to Jeffian who called this spot on by saying good news on mBlox would be offset by bad news on Barvest.

[arthur_lame_stocks] 01/3/2006 17:17

Worth noting that the two most recent disclosable interest holdings are in the hands of activist funds.

Electra Active Management and Moorfield group own 15% between them. With a bit of luck they won´t be passive here. I´m a bit worried that Fellerman and Kleiner will start making new investments as a defensive measure, that is to make the stock less attractive to activists.

If Barvest goes under they should go. I hope they don´t keep throwing money after it. I notice they´ve now also offered an additional guarantee to Barvests supplier.

They really should have written the value of Barvest down this time but perhaps to do so would be for them to admit that they got it wrong.

[lbo] 01/3/2006 16:33

Exactly they are still ebitda positive in tough times. Good businesses are built during tough times and we all forget that you can still say its worth nothing and the NAV of Avanti is still doing very well



A partnership has been established between a team of nightclub industry managers and Avanti Capital plc, the owners of the Po Na Na and Fez chain of bars

[arthur_lame_stocks] 01/3/2006 09:57

Hmmm I think PoNaNa results were pretty dreadful. The company is barely profitable on an EBITDA basis. They can´t cover their interest, let alone invest in their venues.

I hope we see some shareholder activism here again, i´m not sure how much confidence I have in Fellerman and Kleiner.

[lbo] 01/3/2006 08:18

Results are good IMHO and as as I said already Po Na Na has offers but they want more.

[currypasty] 01/3/2006 07:41

change at the top it is then....lol



Avanti Capital Plc, the private equity company, announces that although it
received a number of offers in connection with the sale of Barvest Limited, the
owner of the Po Na Na and Fez bar and club brands, none of these offers
materialised into a proposal considered by the board to be likely to realise an
acceptable value.

As a consequence, Barvest has entered into arrangements to strengthen its
management team through the appointment of Reuben Harley as managing and
operations director, John Smith as finance director and Roger Dyer as commercial
director. This move supplements the management team, which was led, as in
interim measure, by Jeremy Sturgess, who has stepped down. Anna Garrod continues
in the key role of marketing director.

Following these appointments, the Company owns 60% of the equity of Barvest,
with management holding a 40% stake, following their subscription for new shares
in Barvest.

Barvest continues to trade in a challenging environment with continued
uncertainty surrounding the implementation of the new licensing regime and the
introduction of a smoking ban. Nevertheless, the Company remains determined to
further enhance the value of this business over the medium term.

As at 31st December 2005, the carrying value of the Company's investment in
Barvest was #5.98 million or 64 pence per ordinary share.

[arthur_lame_stocks] 28/2/2006 10:48

Just for jeffian. Ultimate Leisure reported today.

'These disappointing results reflect the historic lack of investment in the core
business and the tough trading environment. Our expectations for the year
remain unchanged since we updated the market in January this year. We continue
to take a cautious approach to the second half following the very difficult
trading over the important Christmas and New Year period.



Clearly a tough environment for PoNaNa. If it does go badly for this invesment then I think it´s time for a change at the top here.

[lbo] 24/2/2006 11:02

You forget Barvest is only one investment and if your right that they do need to refurbish and rebrand Po Na Na, even then Avanti are under no obligation to finance them again with any capital. They only have 600k equity and most of the loans have been repaid and they have already made a good return on them with the interest alone.

Personally, I would say that Po Na Na will be still sold for a profit and worse case scenario its worth nothing and they walk away if a big capital injection is needed that they dont think is worth it, which only knocks 21p off the NAV which still gives a NAV of £2.07p

[jeffian] 23/2/2006 23:40

A_L_S/LBO,

Yes, PoNaNa could add something to NAV.........or it could knock it off! (Have a look at ULG and take on board the implications of 'asset impairment' and the capital cost of refurbishment and re-branding underperforming venues). I know we've been down this road before, so there's no point in arguing about it - all will be revealed shortly, I'm sure - but I won't be surprised if all this 'talking up' of NAV and focus on the success of mblox etc is softening up the market for bad news at Barvest.

Regards, Ian

[lbo] 23/2/2006 18:46

mBlox gets $25m funding boost By Robin Langford
23-02-2006 12:41 PM

mBlox has raised an additional $25m in funding, as the mobile transaction network aims to accelerate its new product roll-out and extend its global reach.
The equity investment was led by new investor Trident Capital, a silicon valley venture capital fund, and supported by existing mBlox investors including BA Venture Partners, Norwest Venture Partners, Novus Ventures and Avanti Capital.

The US-based firm said it plans to use the funds for acquisitions in Europe and Asia, infrastructure advancements, and global expansion of mBlox's mobile transaction network services.

The company will focus on the transmission, clearing and settlement of transactions on mobiles worldwide, and said it has no plans to expand into the mobile content sector.

Jeff Clark, mBlox CEO, said: "In 2006, we will expand into new markets and introduce new products for our clients based on our understanding of our customers' needs. We are happy to announce this additional financing which will enable us to accelerate our growth plans."

During 2005, mBlox extended its direct billing reach to 15 countries, launching new services in Australia, Canada, France, Ireland and Germany, and formed partynerships with several brands including MasterCard.

[lbo] 23/2/2006 18:40

I agree (circa 22.8p) and thus gives a revised NAV of about £2.28 (on my/SQC figures above)(with no uplift in Po Na Na)

So if we were trading at a 20% discount to NAV that puts fair value at circa £1.82 per share.

Still good upside IMHO and a sale of Po Na Na would also be further upside.

[arthur_lame_stocks] 23/2/2006 10:32

I reckon that adds about 25p a share to NAV. If they ever sell PoNaNa for the sort of figures that´ve been mooted then I reckon that could add another 40-50p a share to NAV.

A real if at the moment mind you, since they don´t seem able to sell it.

[ynotna] 23/2/2006 08:04

23 February 2006

Avanti Capital PLC
mBlox raises $25m in funding

Further Investment by Avanti in mBlox

Carrying value in mBlox trebled to 61p per Avanti share



Avanti Capital PLC, the private equity company, announces that it has made a
further investment in mBlox Inc, the world's largest mobile transaction network.

mBlox provides message delivery and mobile billing services to businesses
worldwide


The $25m fund-raising by mBlox was led by new investor Trident Capital, the
$1.5bn Silicon Valley fund, which focuses on businesses providing information
connectivity. The fund-raising was also strongly supported by existing mBlox
investors, including Bank of America Venture Partners, Norwest Venture Partners
and Novus Ventures.


The funds were raised by mBlox to support further product roll-out and
geographical expansion.


In the fund-raising, Avanti invested a further £1.73m to bring its total
investment to £3.56m. As a consequence of this investment, the carrying value of
Avanti's shareholding in mBlox has risen from £1.83m (or 19.6p per Avanti
ordinary share) to £5.68m (or 61p per Avanti ordinary share) based on the
current subscription price. The Company's holding in mBlox has increased to
7.9%.


As the only company to focus exclusively on providing a global mobile
transaction network, mBlox has secured leadership in major markets, including
the United States and Europe.


In 2005, mBlox processed approximately 1bn transactions, with a total billing
value of about $400m. mBlox also extended its direct billing reach to 15
countries, launching new services in Australia, Canada, France, Ireland and
Germany and now reaches 1.5bn mobile phone subscribers worldwide.


Julian Fellerman, Joint Chief Executive of Avanti, commented:


'We have been very pleased with the performance of mBlox to date and are
delighted to support this new fund-raising which will enable mBlox to
consolidate its market leading position. We were particularly encouraged by the
strong investment appetite shown by our new co-shareholder Trident Capital, who
led this funding round.'


mBlox CEO, Jeff Clark said:


'mBlox captured the leadership position in the US and Europe for mobile
transaction network services in 2005. In 2006, we will expand into new markets
and introduce new products for our clients based on our understanding of our
customers' needs. We are happy to announce this additional financing which will
enable us to accelerate our growth plans, and we are proud to have Trident
Capital invest in us and bring to us its substantial expertise in billing and
payment transaction services.'

Notes to Editors

About mBlox Inc.:
mBlox is the world's largest mobile transaction network. Specializing in the
commercial and technical complexities of mobile payment and message
transmission, mBlox is in the business of connecting companies with customers.
The result of this dedicated attention to messaging services is that mBlox
delivers comprehensive and dependable SMS transport and financial settlement
services. With an international network of offices, mature operator
relationships and carrier-grade infrastructure, mBlox powers mobile business.
mBlox is headquartered in Sunnyvale, California with EMEA headquarters in London
and offices around the world. For further information visit
www.mblox.com



About Avanti Capital Plc:
Avanti Capital is a private equity company. Unlike conventional close ended
private equity funds, Avanti has no set investment timetable and focuses on the
quality of individual investments rather than a portfolio strategy-led high
quantity investment ethic.


Avanti has an executive team with extensive experience of investing in and
running companies across a wide range of sectors. The professional backgrounds
and business experience of the executive team enable Avanti to see value in
situations, which may be unattractive to the other investors. The presence of
structural issues within business is seen as an opportunity to create more value
from any particular investment.


Avanti's 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.


Avanti Capital is listed on the Alternative Investment Market of the London
Stock Exchange and therefore offers shareholders participation in private equity
deals through a quoted vehicle.


For further information visit
www.avanticap.com

[lbo] 21/2/2006 10:08

Working from the SQC research figures above gives a NAV of at least £2.05 (even if you allow no uplift to Barvest at all)

I also disagree that Barvest is "draining" any cash from Avanti and its been EDITDA positive and as Aurther said would have been making substantial interest payments to Avanti. Also remember that Avanti only have 600k cash invested in Barvest and a lot of the loans were repaid when they refinanced the debt with Barclays so it stands them very little. I also think we have bidders but Avanti are looking for too much.

[arthur_lame_stocks] 20/2/2006 11:54

Maybe Jeffian, but don´t forget the holding company and Barvest are not the same thing. They haven´t guaranteed Barvest´s liabilities as far as i´m aware apart from one lease in Edinburgh. Also don´t forget that much of the interest that Barvest pay actually goes to Avanti.

[jeffian] 20/2/2006 11:01

If I were a cynic, I would say that a bit a pre-announcement 'spin' about rising NAV could be to divert attention from what is happening at the trading/cash level. I freely admit that I know nothing about AVA's tech investments and they might be doing very well, but I am highly suspicious of Barvest as I've posted before. My concern is that it could be draining them of cash and require further capital injection (note the reference in the Times' story to "a fresh set of investments in the leisure sector"!). All will be revealed in due course, no doubt.

Regards, Ian

[arthur_lame_stocks] 20/2/2006 10:42

I think the shares a still only trading at a modest premium to cash.

[currypasty] 20/2/2006 08:37

its been a painful ride... i do hope its blue sky from now on

[lbo] 20/2/2006 08:33

Very good news and I am looking forward to the interims to see how far above £2 the NAV is

[jeff h] 20/2/2006 08:28

Give the Management credit where it's due I suppose (The Times) :-

Avanti Capital, the private equity house quoted on the Alternative Investment Market, is expected to show a sharp increase in net asset value when it reports interim figures during the next few weeks.
The group has a stake in mBlox, the world's largest mobile transaction network, which processes more than one billion transactions annually - including the downloading of ringtones using a mobile phone.

For the year to last June Avanti's net asset value was 178p per share. The City is now expecting the company's net asset value to have risen to well over 200p per share in the six months to December 31.

Analysts are expecting the group to make a fresh set of investments in the leisure and technology sectors.

The group also owns Barvest, the bar and night club group that trades as Po Na Na, and has a stake in Medcenter Inc, which provides online information on drugs for doctors.

Avanti was formed from the merger of two dot-com cash shells after the bursting of the technology