Avanti Communications Share Discussion Threads

[yorgi] 12/10/2012 12:06

I have sent it to you Geheimnis

[geheimnis2] 12/10/2012 12:01

yorgi

ive had a look at the notes to the last interim results and AVN are very transparent around this particular loan

no particular reason to assume there are multiples such instances elsewhere or that the carrying value of the loan/goodwill should be impaired

just another attempt by cawky to instil fear and make a quick buck

quelle surprise

[geheimnis2] 12/10/2012 11:52

no im not a subscriber - but very interested to hear about any more detail

[yorgi] 12/10/2012 11:47

I hope your right Geheimnis have you read his T1ps diary ?

[someuwin] 12/10/2012 11:46

More on this from SC/EK in his diary on t1ps.com now.

[geheimnis2] 12/10/2012 11:41

yorgi

this doesnt have the ring of truth to me

but i await simon's response to my challenge to explain the accounting for this

[yorgi] 12/10/2012 11:39

If what SC is saying is true and he puts more slightly more meat on the bones in his diary then it is pretty bad news more so than the headline figures. When he last shorted AVN in 2011 it was without doubt on false or misinformation but this sounds like it could be true.

It is now up to the BOD to clarify and repudiate if that is the case.....silence on it would not be a good sign.

[someuwin] 12/10/2012 11:16

Very interesting post rwilliams (11031).

Coupled with what SC says in 11028 I wil keep away from AVN.

[rathlindri] 12/10/2012 11:09

Well, it's yet another analysis and unfortunately another negative one.

[geheimnis2] 12/10/2012 11:06

Sorry - didnt want to lose this one. Could you explain this further, Simon - ie what is the double entry accounting you are suggesting and what drives each double entry?


Simon Cawkwell 12 Oct'12 - 11:02 - 11028 of 11030


Gentlemen,

The point is that it is suspected that AVN have financed their own debtors and capitalised the resultant losses as goodwill. Time of course will tell whether this is in fact true. Believe me, if it is true, cash gets depleted pretty quickly.

Simon Cawkwell

[rwilliams57] 12/10/2012 11:05

Have any of you seen this? Opinions welcome

[geheimnis2] 12/10/2012 11:05

interesting one Simon

could you please explain that a little further - perhaps give me the exact double entry accounting as that really does sound like BS

[garymott] 12/10/2012 11:03

Reference SC's post no. 10910 on 10/10/12 'from people who know about AVN':-

"Today's numbers pretty much confirmed the original short case that Hylas 1 won't be able to generate anything like the revenue forecast because of price competition from Eutelsat's ka-sat and limited demand in Europe. It's a bit harder to be as certain on the second satellite because there is less detail from competitors but everything about Avanti's management suggests this is going to disappoint as well. Where is the big mobile backhaul contract they were promising was imminent a year ago? We can't really understand how the backlog can be so large and revenue guidance so weak. But they don't disclose enough information to be sure - our guess is that a lot is just options that customers don't have to take up (comments in these results on backend loading fit with this too)."

Note carefully the last comment, "...our guess is that a lot is just options that customers don't have to take up..."

Now reference AVN's RNS on 11/07/12:-

"Avanti has increased its Backlog (i.e. binding contracts for the sale of capacity in future periods) to £246m, an increase of £33m since Avanti last reported Backlog as at the end of April, 2012. The pipeline of potential sales stands at £502m."

and AVN's RNS on 03/10/11:-

"We provide an expanded definition for pipeline and backlog, and have re-introduced the peak fill rate metric in response to shareholder enquiries.

· The HYLAS 1 peak utilisation rate occurring in Year 3 based on current sales is 36.7%. We are targeting a service launch peak fill rate on HYLAS 2 of 25%.

· Pipeline is defined as the total potential value of contracts which are currently under negotiation in respect of HYLAS 1 and HYLAS 2, and only includes projects where detailed technical information and a committed price has been delivered and the customer is proceeding with work on that basis.

· Backlog includes the total value of contracts signed for sale of services. We do not include any value for the potential renewal of the contracts we sign with service providers beyond the specified term. We do include in backlog the value certain historic continuing business:

o The small directly contracted base of consumer broadband customers in the UK which was built under government funded projects prior to HYLAS 1 launch is assumed to roll forward, since those customers have continued with service beyond their initial term.

o We also assume that our small European consulting business which uses HYLAS 1 to create advanced new technologies for government customers continues to generate the level of turnover it has averaged in the last five years."

So what can we deduce:-

a) SC's 'people who know about AVN' are, in their own words, guessing.
b) SC's 'people who know about AVN' don't read the RNSs.

In conclusion, SC's analysis is based on "guesswork" and "smells".

[simon cawkwell] 12/10/2012 11:02

Gentlemen,

The point is that it is suspected that AVN have financed their own debtors and capitalised the resultant losses as goodwill. Time of course will tell whether this is in fact true. Believe me, if it is true, cash gets depleted pretty quickly.

Simon Cawkwell

[geheimnis2] 12/10/2012 10:33

lol - you hope pal

;-)

[rathlindri] 12/10/2012 10:26

this is....grim!

[johncsimpson] 12/10/2012 09:47

Some forthright comments in last nights RHPS e-alert headed 'Avanti's disappointing results'. Tom Bullford talking to Williams this morning and will update in due course . . .

[cestnous] 12/10/2012 09:42

Todays Investors Chronicle

Avanti shares crash
RESULT: Investors took fright on seeing Avanti's full-year figures, sending the share price down 15 per cent
Investors took fright on seeing Avanti's full-year figures, sending the shares down 15 per cent. The satellite operator's pre-tax losses widened, and revenue, though up, fell short of earlier guidance to the tune of £2.8m. Dig a little deeper, however, and the longer-term picture is not nearly as gloomy.
For one thing, Avanti's HYLAS 2 satellite is now up and running. Targeting emerging markets in Africa and the Middle East with broadband services, the satellite has 22 per cent more capacity than first anticipated as interference precautions (which limit capacity) have not been required after all. "We can now supercharge revenues," says David Williams, chief executive. True, employment costs have risen dramatically as Avanti has taken on new marketing and sales staff to generate HYLAS 2 business. But Mr Williams believes costs will remain broadly flat and new hires can also drum up sales on HYLAS 3, scheduled for launch in 2015, adding: "We have high operational gearing, which means more profit from increased revenue."
With an eye on a full listing, Avanti has adopted more conservative accounting methods. By not booking all the cash it immediately collects in preparing new contracts, Mr Williams says this explains the shortfall in revenue.
Broker Cenkos expects current year adjusted pre-tax losses to rise a third to £20.6m, pencilling in profits of £5.3m in 2014 and £44.5m in 2015.
AVANTI COMMUNICATIONS (AVN)
ORD PRICE: 293p MARKET VALUE: £327m
TOUCH: 292.75-293p 12-MONTH HIGH: 445p LOW: 229p
DIVIDEND YIELD: nil PE RATIO: na
NET ASSET VALUE: 242p NET DEBT: 36%
Year to 30 Jun Turnover (£m) Pre-tax profit (£m) Earnings per share (p) Dividend per share (p)
2008 5.92 -1.36 -3.6 nil
2009 8.04 1.80 3.8 nil
2010 5.82 -1.96 -3.7 nil
2011 5.46 -12.7 -12.1 nil
2012 12.46 -16.0 -14.9 nil
% change +128 - - -
IC VIEW:
Avanti has been meeting its average monthly backlog target of £11m - the amount it needs to fill up its existing satellites by 2016 - and the current backlog of £268m is £87m higher than in December. However, with meaningful profits not expected now until 2015, there is no rush to buy. Hold.
Last IC view: Hold, 270p, 4 Oct 2011

[dunluce] 11/10/2012 23:12

superg1,

I have no axe to grind with any individual for their viewpoint - I merely point out where I see negative sentiment dressed up as something else.

With regard to SC the point is that he brings a different dynamic to the BB/SP because he is widely known and followed and this can lead to a self-fulfilling outcome even though his rationale is flawed.

[sg31] 11/10/2012 22:50

SC tips companies for his own ends like all the others. If he can get others to short the companies he suggests then they do his work for him. Less effective on the long side to be fair.
If it makes you money following his tips good luck to you.

[yorgi] 11/10/2012 22:44

Agreed Jonnib and yes the results were disappointing but not a disaster at all.

[superg1] 11/10/2012 22:37

Jonnibs reply just sums it up really.

I'll leave you too it. Same old SC story. I've never traded AVN either way, never will as I don't trust the BOD.

[malcolmmm] 11/10/2012 22:35

I follow SC and have made much more than I have lost on his tips over the years , recently Barclays 35%, TNI 96% etc, of course I research companies for myself but find his advice a great help to me anyway, he tips risky companies and good sound companies as well so you takes your choice.Pity some investors didnt heed his advce when these were £7, are they making the same mistake this time around?

[superg1] 11/10/2012 22:30

dunluce

Popped over that time all that time ago as a friend asked for advice, and suggested I invest. I took one read and said sell on the Monday post H1 launch. It turned out to be a good call.

The heckling kept me coming back. I shared my view with TB at RHPS as it thought he was wrong to be madly tipping it on those highs. It was clearly getting well ahead of itself. The shorters realised that and made a killing.

I queried why some RHPS clearly ignored some shares that were in a better position and like market than others (PLE). One explantion was that the others were not true penny shares. Hence I queried why ramp AVN at £7 then.

Not supporting other shares was explained as ''not needing our help'. That said it all for me, and hence I do my own research.


It now looks like a long road back to the old highs and it's reasonable to anticipate the market will get more competitive with prices for the service coming down.

As I said Restassured rekindled my interest for going on the attack after a 2 year absence???.

well he seems rather quiet now, perhaps 'red carded' like JC says.

While some may not like a different view, I've had plenty of thanks in the back ground from those that sold out at £7 plus. The logic clearly worked for them.

I wish it would go up, and PI's could get their money back and make profits.

Just look how many shares are held in the 'employee benefit trust' then compare that to the directors actual holdings. Then look which employee's actually benefit.