Avanti Communications Share Discussion Threads

[itchycrack] 10/10/2012 11:40

SC used to have many followers, but doesn't anymore, this is just a perception he likes to surround himself with, has no real influence anymore, simply a has-been. Only the totally misguided attach any value to his rumblings.

[deanroberthunt] 10/10/2012 11:34

So noone got an opinion on WH Smiths then...............

[malcolmmm] 10/10/2012 11:30

I wouldn't be selling at the moment I can see these bouncing, SC has lots of followers so weakness could be short term and also income has increased by 246% to £15 million. Cash at year end was £76.7 million and the backlog increased by 57% to £268 million, not bad

[billytkid2] 10/10/2012 11:29

Cenkos:

Growth moves to the right
Annual results are broadly in line with expectations and the win-rate of new
business has been maintained. In addition, the company believes it's on track to fill
current satellite capacity in 2016. However, the Board has taken a more prudent
view of the rate at which capacity is filled in the next two years and consequently
our forecasts have reduced as growth is pushed out a year. The long term
attractions of the business case remain as highlighted by a backlog of contracted
revenues of £268m and a pipeline of £550m+.
 Annual results. Revenue and other operating income increased by 200%+ to
£15.0m; in-line with management expectations but £2.8m below stated guidance
due to a decision to smooth revenues over the entire life of new contracts. The
EBITDA loss was £5.3m compared to our estimate of a profit of £2.1m due to the
accounting change and also extra investment in sales and marketing functions. Net
debt was £98.3m - c.£20m above forecasts principally due to a rise in cap-ex (partly
to enhance the infrastructure in gateway earth stations). The order backlog has
increased from £171m to £286m and the pipeline from £473m to £552m.
 Forecasts. While the Board still expects that both HYLAS 1 and 2 will be at full
capacity in 2016 the view now is that this process will be much more back-end
weighted. In addition, near term expectations have become more prudent to
reflect actual rather than potential new business wins and customers are also
increasingly placing orders on the basis of a ramp up in bandwidth capacity. Our
new forecasts below are approximately 40% lower in terms of revenue and with a
corresponding flow through to EBITDA where the reduction is c.50% in FY14.
 Outlook. The fundamental attractions of the business case are still clear; the launch
of HYLAS 2 followed by the smaller but highly cost efficient HYLAS 3 three years
hence, will mean that 80% of the Group's capacity (a total of 18 GHz and above
previous expectations) will be focussed on high growth emerging markets. In
addition the growth drivers which underpin the appeal of the 5 key business
segments for satellite broadband connectivity are still very positive. However, not
surprisingly, the rate at which Avanti's unique offering can penetrate these new
markets will remain a matter of debate and for now, the company needs to
demonstrate confidence in the trajectory of new forecasts.
 Valuation. New forecasts push out the expectation of an attractive earnings based
multiple by one year to FY15 but the underlying long term value is still apparent in
the implicit sales price per MHz of the current EV (c.$300 compared to market
prices of $2000). This EV also only reflects the build costs of the fleet and assuming
all 3 satellites can be filled, EPS can reach into 3 figures on a 5 year plus view.

Forecasts and Ratios
Year end June (£m) 2011A 2012A 2013E 2014E 2015E
Revenue 5.5 15.0 34.5 68.7 110.6
EBITDA -9.0 -4.8 11.4 39.7 76.9
PBT Adj -12.0 -15.4 -20.6 5.3 44.5
EPS Adj -11.2 -14.2 -17.3 2.7 33.1
P/E -32.6 -25.7 -21.0 133.8 11.0

[loverat] 10/10/2012 11:23

Well, it seems the negative views here consist of individuals who feel the RNS is perhaps vague in some areas. Vagueness is often used to hide specifics and facts which may be bubbling away below the surface. Fair enough I guess, as we have seen this kind of thing before.

However, check out Simon Cawkwell's posts for the ultimate in being vague. 'Something don't smell right' but 'I think I am very informed' with no supporting reasons or explanations. Perhaps when he smells blood, his posts will become more specific like - 'imminent profit warning' and then he will do his usual vanishing act when people ask him to explain.

Someone in his position should be more careful. It is all well and good talking shares down but if he has any integrity he will provide commentary on the reasons he is shorting. Otherwise his posts are pointless for an information board and only serve to undermine the company and its share price further.

[nugacity] 10/10/2012 11:21

johnc

sorry, I think I confused rogk and volvo over the predictions.

The former has gone very quiet today - out of sight out of mind - and volvo took over the role today and I seem to have merged the two :O(

Today's investors are so aware of timescales - imho 2016 frightened the sellers - if we maximimise our earnings from #1 amd #2 in 2016 we are going to be earning good profits long before then - it is not a vertical graph on that day in 2016!

[kmann] 10/10/2012 11:16

Hi Simon, are you suggesting a collapse of the company or a realistic re-rating of the share price? if so what?

Most long investors here are looking 2-5 years ahead, so any shorting effects would not concern or offer further buying opportunity.

[buywell2] 10/10/2012 11:10

Why have the company appointed so many new staff in the last 12 months ?

Could it be that clients are not falling over themselves to sign up ?


Can anyone give a couple of examples of a similar company to AVN making profits after 5 years of operating .... anywhere .... USA for example ?

[jeffian] 10/10/2012 11:09

Not sure there was "nothing unexpected", jadeticl. Revenues came in well below forecast, more so as I wasn't expecting the recent legal settlement to be included within revenues. Having said that, I can't see that there is anything which would merit the use of "smell" (which implies that all is not what it seems). This is not a company dealing with vague concepts such as 'brands' or 'Intellectual Property'; it actually has real assets in the form of 2 satellites which work and which are capable of generating significant revenues. I can see that the share price may continue to suffer while uncertainty remains about the timing and quantity of revenues but I believe the longer term prospects remain good and have doubled my holding today.

[deanroberthunt] 10/10/2012 11:07

anyone got a view on WH Smiths tomorrow ?

[malcolmmm] 10/10/2012 11:03

I sold at 368p with a re-entry price of 250p as stated on here,long termers will be rewarde imo but I prefer to trade them for now.

[backmarker] 10/10/2012 11:01

at least they're being flexible in their selling propositions.

but EMEA is a different market from Europe. there are many more broadband "empty spaces" and I would imagine a sufficient number of wealthy individuals who will pay for a good service. I don't think that AVN is going to have difficulty selling its space.

given the economic climate it would not be surprising if customers are committing only for the minimum in the short term. hence the backending. but if the end-user demand is there then the curve will flatten out again. I suspect the BoD may be being a bit cautious here, to give themselves room for maneuver if the economic climate worsens further as it may. however I would expect EMEA demand for broadband would be less affected in these circumstances.

[simon cawkwell] 10/10/2012 11:00

jadeticl,

I am a short seller and have every reason to talk it down. However, I think I am well informed.

Simon Cawkwell

[miti 1000] 10/10/2012 10:59

Nice to see EK short as well..always a good sign of further falls.He gets the odd one wrong but not in this case imo.

[jadeticl] 10/10/2012 10:54

Smells OK to me Cawky. So it is your reputation against mine!! I was an industrial chemist with a very large smell bank. Nothing unexpected in this report, exceot the shape of the backlog, so no unpleasant smell to me. When I bought originally it was evident that profits would not be before 2015.
PS I am not a short seller so have no reason to talk it down. How about you?

[disc0dave] 10/10/2012 10:52

yes, a few things to worry about but the Director buying has got to be seen as key here. Not expecting much today - maybe SC will profit short term, but like last week I'd expect it to be quite a bit higher by the end of the week...

[count chris] 10/10/2012 10:50

Aborted the SB since the bounce I was hoping for doesn't seem to be happening. Still got plenty of shares though...

[geheimnis2] 10/10/2012 10:47

no surprise to hear southern europe is a little weaker than hoped at the start of the business plan

[parvez] 10/10/2012 10:46

he is using his brains to profit !! I may well wait to buy at around £2 mark

[superg1] 10/10/2012 10:45

Vmh

Don't forget the employee benefit scheme pot, if it's still there

[peterwaller395] 10/10/2012 10:44

Bought another £6k @ 294 and happy. SC can do what he wants, he's a horse trader and maybe got lucky with Northern Rock. Long term prospects are still great but patience needed - still a company in it's infancy. Director buying supports confidence in the ability to deliver. Time to average down. Sell other poor performing holdings and continue to add to AVN - those that do will be rewarded.

[loverat] 10/10/2012 10:41

Seems Cawkwell is using his position to profit from this.

Folks will no doubt recall his 'call' on Noventa at 1p that the company was imminently bankrupt. That prompted a sell off when he announced it on here. A few days the company issued a statement which propelled the shares to 5p.