Avanti Communications Share Discussion Threads

[yorgi] 20/2/2011 19:16

Well they seem to be out of sync with the majority.

[cestnous] 20/2/2011 15:11

I.C. this week calls it "high enough" for the moment. Seems a rather timid approach , even for such a conservative publication.

[yorgi] 20/2/2011 14:01

I have added link to Gary White's tip for AVN from the Questor Tips in the Telegraph as I thought it lays the facts out clearly and the case for buying based on its future prospects.

Several of us have commented that the news that Hylas1 is now is service will have a positive affect on the share price so that lift should not be far away now, 4 to 6 weeks away.

[melody9999] 19/2/2011 00:03

It's not just a question of 'is there a demand?' but also 'is there a demand at a good price?'

Here the relevant para from the interims:

"The demand for our services is very strong and our pipeline of opportunities continues to grow. The order book (also known as "backlog" in our industry) across the two satellites now totals £229 million with the average length of contracts being 7.2 years for HYLAS 1 and 4.3 years for HYLAS 2. The average prices per MHz per month are materially ahead of expectations. The pipeline of potential new business in negotiation amounts to £389m, not including transactions which are under negotiation to support the efficient debt financing of HYLAS 3."

No cause to worry there then

[gorvachof] 18/2/2011 19:02

Some good discussion here today for a change....positive and negative welcome in my mind.

[jeffian] 18/2/2011 17:32

This 'who are they going to sell it to?' speculation seems extraordinary to me. AVN have funded their first 2 satellites and recently completed a successful fundraising to replace earlier debt. This surely involves a business plan and substantial due diligence by lenders and investors to satisfy themselves that their projections for the market and income streams were realistic. I don't think this sort of venture, involving substantial investment, is done on the basis of 'Well let's stick a satellite up there and then see who we can sell it to.......'

As for "volatility", I'm not sure there's been much. After a strong rise, it's been pretty settled around the 600 mark for nearly 6 months, other than the spike up on successful launch (which isn't surprising), and I'm not expecting to see much movement until H1 comes onstream at the end of March and real cash starts flowing.

[yorgi] 18/2/2011 17:29

I'm sure it has Husbod and confident that the share price will reflect this in time, costs for AVN are up front but as Hylas1 comes into service soon the first revenues start to flow and although further costs to Hylas2 and 3 when they are both in service AVN will have a substantial revenue stream.

I know Sky is a different product but I remember the early days of Sky and BSB before BSB was taken over by sky there were huge losses in the early years but now the revenues roll in !

I wish I had funds free to add at this price.

[husbod] 18/2/2011 17:12

Avanti could be to broadband as mobiles are to landlines. Whole swathes of the developing world have by-passed the need and colossal expense of digging up their roads etc and have simply gone straight to wireless.

Would make a great deal of sense to do the same for broadband. Plus, even in the developed world there are loads of areas where it will never be economic to provide physical infrastructure.

Seems to me to have fantastic potential.

[naeclue] 18/2/2011 14:27

If you read the latest statement from Avanti, they are closing multi-year contracts, and anticipate filling the capacity of Hylas 1.

Bear in mind that Hylas 2 and Hylas 3 will be focused on areas like the Middle East, Africa and South America. They are a long way from infrastructure at all for a lot of people, let alone infrastructure upgrades. I think there were European grants that meant Hylas 1 was in Europe, but the market is surely centered elsewhere.

Hylas 2 has been funded as a larger satellite (3 times the size of Hylas 1), on very attractive terms. It looks like Hylas 3 will work the same way. To my mind this implies that the groups providing the finance have looked closely at Avanti and are very comfortable with their business model.

I find the volatility in Avanti a little baffling. I'm happy to hold stock as a long term play; spread betting is a little tricky.

[horneblower] 18/2/2011 14:12

You may be surprised at the size of the rural population in the satellite's footprint. Probably 30 million plus housholds without broadband. Whether they will pay for it or not is another matter. Governments may be forced to subsidise them.
Big business backup is BIG business and has the advantage of not normally using any bandwidth (since it is designed NOT to be used!)

[ddinksdadd] 18/2/2011 14:03

Thanks for that!

Rural communities im not so sure on that, by definition there will likely be limited numbers of users.

Backup comms for business? yes i could buy into that, but then again back up implies less use than mainline comms

I guess it all comes down to the ££££ at the end of the day? best i go hunt those out !!

dd

[horneblower] 18/2/2011 13:45

Deep rural communities are not going to get cable anytime soon.
Big business communications backup needs, by definition, to be a different way of transmission otherwise it's not really a backup.
There will be a market for Sat-broadband for some long time yet but there will also be competition.

[ddinksdadd] 18/2/2011 13:35

Hello Everyone

Im doing some research on the prospects for this company on behalf of a friend.

Ive already done a little bit of research, all seems good assuming roll out of services goes to plan, happy with that bit!

My concern really is could terrestrial based infrastucture upgrades in the coming years out compete AVN? ie is there a sizeable market for data transmission that ONLY a satellite based service could cater for?

In the jargon what is its unique selling point?

Apologies in advance for BS businessspeak :)

dd

[restassured] 18/2/2011 08:00

14th february 2011

"We previously described our strategy to seek efficient ways to finance the HYLAS 3 satellite. The debt finance secured from export credit agencies for HYLAS 2 provided relatively high leverage, thus minimising equity dilution for shareholders, and also bears a comparatively low coupon of below 6%.In order to repeat this success, we decided to seek pre sales contracts from customers on the HYLAS 3 satellite, which can then be used to finance the satellite in the debt market, protecting shareholders interest. Such financings are time consuming and complex, but well suited to a business like Avanti which has very long term assets and aspirations. I am pleased to report that we are in advanced negotiations on several significant pre-sales contracts which should enable us access efficient capital and we hope to update the market soon."

[restassured] 18/2/2011 07:55

Questor share tip: Avanti's share price fall means its a good time to buy
Avanti is an unusual company for a Questor recommendation. It is loss-making, does not pay a dividend, and its shares are very volatile. Nevertheless, the company's prospects look outstanding. Buy.


By Garry White 7:00AM GMT 17 Feb 2011
Avanti Communications
608p -15
Questor says BUY

This investment is basically a play on data. The world is becoming very data-hungry as smartphones, iPads and other mobile devices become increasingly popular. There is also demand for internet services in remote locations where traditional cables cannot reach – such as ships. In essence, demand for data is expected to exceed capacity for many years.

John Brackenbury CBE, the company's chairman, put the company's business model succinctly in its interim numbers released this week: "Our opportunity is not specific to one product or market, but more generally to the global growth in demand for data. The proliferation of new internet applications, particularly those which are video intensive, and new devices enabling consumers to connect to the internet, are the drivers of our market."

Avanti will provide satellite broadband services to telecoms companies – which will then use them to supply homes, businesses other institutions. The company's first satellite, HYLAS 1, was launched on November 26 last year and it is the first super-fast broadband satellite launched in Europe. It exploits new technology that will enable Avanti to offer speeds of between 2Mb and 50Mb at comparable prices to other broadband providers.

The company's second satellite called HYLAS 2 is fully funded and will launch in the second quarter of 2012. This will extend Avanti's coverage to Africa and the Middle East. The HYLAS 3 satellite is currently being designed.

In the six-month period to December, the Avanti's pre-tax loss came in at £6.3m, compared with £3.7m in the first half of last year. The loss increased because the company stopped selling data capacity it rented off another satellite in anticipation of the launch of its own satellite. Avanti's HYLAS 1 is expected to be full within three years but the company is not expected to post a profit until 2012. The loss occurred because the company redeployed resources out of its consulting business to focus on the generation of pre-sales for the HYLAS fleet. Another reason for the loss widening was that the previous period included revenue from a contract that finished in June 2010.

Demand for Avanti's services is strong and the order book for HYLAS 1 and 2 has reached £229m, with the pipeline growing to £389m.

The majority of City analysts covering the stock are extremely upbeat about Avanti's prospects. Of the five analysts monitored by Bloomberg, one has a "sell" rating, but the four analysts with "buy" ratings on the shares have an average price target of £16.74, more than 170pc higher than the current share price.

Of course, there are risks in investing in a high-tech, loss-making company such as Avanti and this can be seen in the volatility of the shares. However, the successful launch of the first satellite has de-risked the business case – but it remains an investment on which you should not bet the farm.

The shares were first recommended on January 8 last year at 467½p and they are now up 30pc compared with a market up 10pc. The shares have drifted lower since the HYLAS 1 satellite was launched in December from a high of 735p on profit taking, so now looks like a good time to make a new purchase.

[superg1] 18/2/2011 07:51

Reasonable debate

I note the director sell £5m. A few frowns with that but it's obvious ebt shares were free of tax, shortly after the £5m sale that tax loophole will close, so the £50m in the pot set up tax free for the chosen few is now going to be suffer.

A theory for me. Price rises, The Ebt sells some, it drops, Caledonian get more cheaply, it rises, bet sell Just a theory and hunch but it seems there is a seller. Caught up in all that are the PI's.

Love me or hate me I have the PI's interest at heart, not the Bod or institutions, not even me as I make nothing out of adding balance. Balance which has so far defeated every broker and hype claim. Just through common sense os seeing what is staring you right in the face

[superg1] 18/2/2011 07:51

Reasonable debate

I note the director sell £5m. A few frowns with that but it's obvious ebt shares were free of tax, shortly after the £5m sale that tax loophole was closed, so the £50m in the pot set up tax free for the chosen few is now going to suffer.

A theory for me. Price rises, The Ebt sells some, it drops, Caledonian get more cheaply, it rises, ebt sell etc. Just a theory and hunch but it seems there is a seller. Caught up in all that are the PI's.

Love me or hate me I have the PI's interest at heart, not the Bod or institutions, not even me as I make nothing out of adding balance. Balance which has so far defeated every broker and hype claim. Just through common sense of seeing what is staring you right in the face

[greengiant] 18/2/2011 07:46

FT Article here



superg1 - Avanti would certainly not be the first company to move outside the UK for tax purposes. Good luck to them, once this government realises that CT rates are too high and brings them down the better.

Anyway going back into hibernation mode now

gg

[superg1] 17/2/2011 21:32

Dimwitted

Ha ha who is the one that has got this spot on. If you can't see what is happening you are the dimwits.

Selling in the background, who might that be I wonder.

Even Pharma jiles the protrader on iii says this share isn't following the charts.

Tom Bulfords outrageous hype isn't even helping. I would imagine it's caledonian or the employee benefit scheme off loading while the paid brokers keep the hype going along with TB.

Just a hunch of course.

[buck581] 17/2/2011 21:21

Greengiant
I've missed the FT article you're referring to. Please point me in the right direction. Thanks,Buck.

[greengiant] 17/2/2011 20:26

lol re cycling. Took the opportunity today to buy 42.5k shares today to add to my holdings. Although the results were exceptionally positive, the FT article may have rattled a few people tho' so not surprised about the drop. Also post results PI selling is normal.

gg

[yorgi] 17/2/2011 17:44

I'm not sure what to say about that Peedlep, it would appear the volume was high but at the moment I don't know that I trust any numbers on ADVFN at the moment. However at saying that AVN is down again that's not in doubt, but anyone that has been in this "game" for some years will know that sometimes the share price for a company does make no sense be it low or high but in time it turns works itself out.

[peedlep] 17/2/2011 16:56

it is strange...didn't someone the other day say Avanti went up on high volume and down on low?? Think that one's been shot down....hope the satellite hasn't!

[yorgi] 17/2/2011 14:01

Unless you believe that what we were told in the recent update was a lies then you have your answer ! I don't have any available funds today, if I did I would add.

I trust the company, believe in the product and the revenues it will in time bring in, so there is only one answer for me.