Avanti Communications Share Discussion Threads

[woozle1] 17/2/2014 13:58

MM. while I agree with you about long term investing, these satellites are short lived and every day lost can not be regained. So, while these assets continue to be underused, the value is seeping away. The longer term play is more satellites but given they are struggling to fill the existing ones, the longer term argument is looking weak, at the moment. Re the net asset vale versus the market cap makes this compelling, there is now a tonne of debt.
W

[michaelmouse] 17/2/2014 13:39

Just one final thought. I mentioned that £7+ was silly a year or two ago. If the company does eventually prosper, it will be interesting to see what the share price is in say five years time. Perhaps the £7+ won't sound silly at all, it may even look cheap?

Michael.

[michaelmouse] 17/2/2014 13:34

Megabear -

"Why are you telling me no advice intended or given and then next thing giving me sleep advice?"

That did actually make me laugh, very good!

"History of disappointment?" - The successful launch of two fully operational satellites? You're confusing share price performance with company progress. The company was grossly overvalued at £7+ which was a price achieved before the launch of even one satellite I believe. I wouldn't have paid that price, that was just silly.

"What's your point on mkt cap with tangible asset value about when the assets fail to earn a return to justify the price paid for them?"

Are you sure the assets will have failed to earn a return to justify the price paid for them over the next year or two? I think your time horizon may need extending a little? Besides, acquisitions often take place because a third party believes that they can utilise the assets more effectively.

Just to clarify though, as you will have read, I said a takeover may be the worst scenario, I'm hopeful that the next two years will be fruitful for Avanti and patient long term investors will be rewarded.

By the way, since you don't hold the shares and have no pecuniary interest in Avanti's performance, if it were me, I'd relax and not post every five minutes trying to point out the error of our ways! This isn't advice I might add.

In fact no advice given or intended, especially sleep advice.

Michael.

[megabear] 17/2/2014 12:29

Woozle - agreed capacity is still too low. I take your point on blue chips arm twisting for better credit terms but they also do tend to pay when the invoices come in. Not much paying on time seems to be going on.

[megabear] 17/2/2014 12:26

Michael - so you're happy to ignore the history of disappointment? I haven't said I'd short AVN but not sure, hoping to one day wake up to a bid is enough to justify a long position. What's your point on mkt cap with tangible asset value about when the assets fail to earn a return to justify the price paid for them? Why are you telling me no advice intended or given and then next thing giving me sleep advice?

[woozle1] 17/2/2014 12:13

MB, good point re selling kit but the capacity utilisation is still too low. Actually extending credit does sit with blue chip clients as they normally (because they can!) demand generous credit terms. So, maybe that's the real reason for the increase in debtors. That said, I'm not taking any more chances.
W

[michaelmouse] 17/2/2014 12:12

Megabear - "Michaelmouse's observations seem mainly to be repetition of the what the company says. No real analysis there and pretty naive to go along with what management say..."

Yes, how naïve of me. Far better to take on board the inaccurate ramblings of the anonymous spivs and chancers on a bulletin board who have clearly taken the extreme risk of shorting the shares through high risk spread betting.

I notice even Cawkwell can't make up his mind what the best line of attack is.

His first comment was that he had it on good authority a rights issue was imminent. Later, perhaps realising that in the present climate this might not be viewed as a bad thing, he quickly decided that the company was heading rapidly towards insolvency.

The attacks sound increasingly desperate to be honest, and if there were a rights issue then Cawkwell would surely be in trouble for insider dealing.

Avanti is a risky and speculative investment, but I'd think long and hard before shorting it. The market cap. is close to tangible asset value, revenues are improving rapidly and they have an increasing list of quality clients.

Any positive news story regarding further substantial contract wins or any bid rumours would cause a massive short squeeze. Imagine waking up to an RNS like that if you've gambled with a large spread bet.

No advice intended or given. Sleep easy.

Michael.

[megabear] 17/2/2014 11:40

Woozle1 - the GM could also be lower because they're flogging kit instead of capacity. Also extending credit terms doesn't really sit with the claim of getting increasing blue chip customers.

Rogk - Michaelmouse's observations seem mainly to be repetition of the what the company says. No real analysis there and pretty naive to go along with what management say, given the history of disappointment.

Chart don't look good.

[woozle1] 17/2/2014 11:38

CR, one more thing. Capacity on HI was planned to be sold out in just three years. We are approaching the 4th anniversary and it's still only 45% sold. These are assets with finite lives and ever day that it is lost can not be recouped.

I used to be long this and set myself verifiable targets for holding on as I think there is s screaming demand for what they are providing. Those two were capacity sales and gross margins. As these are the only signals for an external investors. In this regard, there has been strong track record in under delivery.

The only reason to hold on is a bid from another player but the chances of that have fallen given the large high yield bond that is slowly but inexorably leaching away value from the equity. The company raised a PIK before and were absolutely confident that once HI was up in the air that they'd be able to refinance with cheap bank finance. This did not happen and the company were forced into a right issue to pay it off.

If you look through the company guff and at the at hard facts, these satellites are not performing.

W

[woozle1] 17/2/2014 11:21

CR, you need to look at the gross margin to realise that things are not going well. They are selling capacity at very low rates just to fill the satellites. HI has been up for some time and should at least be generating a GM of 50%+. Believe me, if the GM were higher I'd be invested again. The GM is the only real indication of the businesses performance. The increase in working capital is also a concern given the high risk of non payment. Most telcos, in particular mobile, get paid up front and for very good reasons.
W

[revoman] 17/2/2014 11:02

Rogk, I'm pleased for you that you made money and sold out. Now why don't you just move along instead of distorting the facts and trying to spook everyone here. When you have something constructive and factual to say, whether positive or negative, then say it.

[caribbeanrob] 17/2/2014 09:13

Rogk - You are possibly aware but for the benefit of all readers the 81% increase in revenue does not include the one-off payment for the settlement on Hylas 2 and I will explain why by reference to the interims below.

Interim statement:



Page 5 of 14:



"Income Statement

Revenues for the six month period to 31 December 2013 were $25.0 million, an increase of 81% over
the same period last year and 36% higher than the six months to 30 June 2013."



Page 7 of 14:

"CONSOLIDATED UNAUDITED INCOME STATEMENT

Unaudited Half-year 31-Dec-13 $000's


Revenue 24,961
Cost of sales (15,071)
Satellite depreciation (22,470)
Gross loss (12,580)
Operating expenses (16,581)
Other operating income (Note 7) 6,500
Loss from operations (22,661)"

Quite clearly, the USD24,961k of revenue is a separate figure from the USD6,500k of other operating income.


Referring to note 7 on page 12 of 14:

"7. Other operating income


Unaudited Half-year 31-Dec-13 $000's

Exchange gain/(loss) on trade receivables and payables 463
Ex gratia receipt 5,342
Other grant income 695
Liquidated damages -
Total other operating income 6,500


The ex gratia receipt arose following a commercial settlement in relation to the Hylas 2 procurement."

It is very clear in the interim statements that the ex-gratia receipt is included in Other operating income and not in the USD25m revenue figure which is correctly stated as increased by 81% from the prior year.

Now - coming back to your post 212:

"Rogk 17 Feb'14 - 08:14 - 212 of 212 0 0


re michaelmouse

Revenues for the year were up an impressive 81%
--------------------------------

Are you all sleepwalking ??? A one off item can't be classed as sales !!!"

I would say that your assertion that the ex-gratia payment is included in the sales figure is either incorrect or false and, if I were you, I would exercise more judgment in posting statements such as these.

Given your choice to ignore my request for you to explain the motives behind your posts and your incorrect/false post I, for one, will be disregarding the content of your future posts. To all other investors I would suggest that you do your own research rather than rely on assertions made on these bulletin boards.

[divinausa1] 16/2/2014 23:07

i would not be surprized to see more director buys here...i think soon we will see the end of the shorters campaign its starting to become clear this is going to be a big winner.

"The second half started positively with the award of a large African government contract. We won several million dollars of broadband business in Western Europe from competitors based on quality of service advantages. Our cellular backhaul product gained new pilot projects in Africa last month, and our SNG product is currently used in high profile events like Sochi. We continue to sell to new large and expert customers and backlog is growing. Our business growth will remain difficult to forecast, but the growth in the size and quality of the customer base and a satisfying repeat order rate gives us firm belief that we are building a profitable and enduring business."

looking forward to divi's in the future and a share price north of £5

[michaelmouse] 16/2/2014 20:41

hxxp://michae1mouse.blogspot.co.uk/2014/02/avanti-communications-interims.html

Michael.

[revoman] 16/2/2014 11:21

Rogk indeed used to be a real AVN bull, the obviously (sadly) sold out and lost money and since has become bitter and twisted about AVN. I'm not sure about his motivation now either, he should just move along...

[gekks] 16/2/2014 11:01

Rogk has posted negatively about AVN ever since selling out at the lows

[caribbeanrob] 16/2/2014 10:49

Rogk - I've only been invested here for 6 months so I don't know your background here. I know Avanti's history - share price ballooning up, short attacks etc. I've also noticed your posts on interactive investor. I gather you're not currently invested here but I'm not clear on the motivation for your posts. Are you short on Avanti or scarred by previous Avanti experience that you feel the need to warn all other investors? I'm genuinely curious as to the motivation, enthusiasm and, indeed, admirable dedication for talking the price down?

Myself, I have some background in carrier telecoms and have worked in countries with poor communications far too many times to list. I appreciate the exponential growth in demand for data and the worth of data connectivity in the less developed world. I can see a future market for Avanti's assets hence my reason for investing. I also appreciate the potential technological limitations, marketing issues and credit control issues of operating in these markets. I certainly don't see Avanti as a sure-thing investment but see sufficient potential upside to justify my long-term investment hence my long position. I'm just curious as to your back-story here.

[wilksey1] 14/2/2014 14:30

hxxp://avantiplc.com/sites/default/files/interim-presentation-120214.pdf


jeffian have a look at there presentation and see if they can answer any of your questions

[bulltradept] 14/2/2014 11:18

Oh dear, having read all the issues with this company and seeing the share price collapse, i.e. Mr Market figuring it out, I shall watch from the side lines.

GLA Longs I think you really are going to need it.