Avanti Communications Share Discussion Threads

[someuwin] 16/11/2010 23:18

All growth companies need money to expand. They either borrow it, which erodes EPS for investors. Or they issue more shares, which erodes EPS for investors.

AVN's business model relies on the fact that income from bandwidth sales will be more than the cost of putting the satellites up there.

If they've got that basic equation wrong, then the business will fail. If (as most of us here expect) they have got it right there will be handsome returns for all.

Don't forget that although satellites are expensive upfront, once they are up and running most of the income will flow right down to the bottom line.

"The market for 2Mb satellite broadband products in the markets served by Avanti is estimated at more than 100 million households."

100,000,000 * £30 per month = £36 billion per year!

[melody9999] 16/11/2010 21:00

Plasterkay - I think it is a point of debate as to how AVN finances its operation, and what will create most value for shareholders. If additional financing through a placing allows the company to start generating profits more quickly, then within reason, I am all in favour. These profits can then be used to fund further initiatives.

2 other thoughts - as PIs, we have limited cash. There is an opportunity cost to consider when leaving your funds invested in a company - and that cost is the opportunity to place those funds elsewhere and earn more money .... so I am looking for companies that will grow quickly.

Finally if you are worried about the 2nd placing, just reduce or move your funds elsewhere. Personally I am sticking around because I think the launch risk is overplayed...... and therefore there is pent up demand which will be realised after 26 Nov causing an increase in the share price which will be maintained as profits increase..

[yorgi] 16/11/2010 18:58

Well if you have Ib i've missed it as well.....as far as I konw we are still on for the 25th

[ib1905] 16/11/2010 18:47

On a more serious note - did I miss a new launch date? Ariane and Avanti website unchanged and Ariane still says "The Ariane 5's liftoff with Intelsat 17 and HYLAS 1 is set for November 25, and will be the 198th mission of an Ariane family launcher."
Am now going to be in London next week and gutted won't be able to watch online live - commitments etc. never mind fully confident it will go well.

[yorgi] 16/11/2010 18:38

Yes Ib :-) but I didn't want to give plasterkay to many things to think about :-)

[ib1905] 16/11/2010 18:20

At the risk of being flippant - should it not be "diddly squat"


:0)

[yorgi] 16/11/2010 18:16

Plasterkay

Can't quite see why you have thrown that rather oddly thought out comment

Any company that raises money by issuing more shares dilutes the value to excisting holders, I'm quite sure we are all aware of that. As borrowing money to expand or finance a large project will have an impact on profits. However if the money raised by either method leads to more income in the future and larger profits then it can well enhance shareholder value

Think about it before you make half baked comments that mean diddy squat.....if you are able to understand

[jeffian] 16/11/2010 18:05

plasterkay,

Like Jonnyno1, I fail to get your point. The Placing on 12 July provided sufficient funds to pay off the cost of Hylas 1, proceed with Hylas 2 and initiate procurement of Hylas 3.

"The net proceeds from the Placing will help provide Avanti with funds in order to repay the fixed term facilities of a principal amount of £32 million (£53 million including accrued interest and an early repayment discount) borrowed in order to finance HYLAS 1, Avanti's first satellite, and to enable Avanti to initiate the procurement of a third satellite. It will also provide additional resources for the Company to re-domicile the HYLAS 2 assets offshore."

With the cashflows from Hylas 1 and contracts in place for Hylas 2, it will presumably be possible to finance the next stage from borrowings secured on those revenues. One can't ever rule out future fundraising but the the odds on substantial dilution in the near future look pretty long to me.

[blue forever] 16/11/2010 17:53

launch date moved to 26th or is that old news?

[jonnyno1] 16/11/2010 17:09

sorry plasterkay dont follow that logic, can you explain

[plasterkay] 16/11/2010 15:52

Share dilution is the biggest threat to the share price. Just like government and their quantitative easing, printing shares to pay for satellites destroys shareholder wealth, in the long run. You can have a 20 billion market cap but if you've diluted your shares to create it, then it means diddy squat to shareholders.

[yorgi] 16/11/2010 13:33

Well worth posting Share Shark......David Williams focus and ambition played a large part in my decision to buy into AVN for the first time

[pixi] 16/11/2010 13:27

I bought another 3034 today.

[2vdm] 16/11/2010 10:55

someone obviously believes in its success as that 13k buy = £85K. good to see

[bongo bwana] 16/11/2010 07:03

We have not seen Dolores here for a while.

[share_shark] 15/11/2010 23:24

Dolores. Hope you have no objection to my posting of an old comment of yours?.

I note too that in the same year long term shareholders were talking of a profit of £140m per year or £2 per share profit !. Can that be correct or did I just drink too much wine ?.

Dolores123 - 19 Nov'09 - 13:58 - 783 of 1717


A recent quote from the chairman stated in one of Avanti's web site 3rd party articles was as follows:-

"Mr Williams is clearly not lacking in ambition and said that if the company continued to launch satellites at a rate of one every two years, one day it could rival some of the telecoms sector's biggest companies in size."

[share_shark] 15/11/2010 17:21

.When you have a moment BB,take a good look at VOG,at the volumes and Mels comments on them too!.

.

[share_shark] 15/11/2010 17:01

You are right guys. There is a lot of confusion.Three of my lads have bought another "Avanti" despite me providing them with the correct epic code. .;-(.


look at this link too.

[yorgi] 15/11/2010 13:41

Have a listen to this Jad

[chrissey] 15/11/2010 13:39

read the broker reports jad, they are probably the best guide, while usually somewhat optimistic.

GE&CR have several and recently too.

[jadeticl] 15/11/2010 12:05

Is it true that this company, for all its promise, will not be profitable until 2013 or more likely 2014?

[bongo bwana] 15/11/2010 10:35

Did I mention that I doubled my holding here last week?