Avanti Communications Share Discussion Threads

[megabear] 19/2/2014 07:53

Is this a new contract or a contract renewal? Rememebr, Avanti has previously announced a 3 year, 3G contract with Hutchison in Ireland, which could be classed as providing services to a "Vodafone European Company". Because of lack of detail it's difficult to tell if it's just a renewal. Anyone know?

[jojaken] 19/2/2014 07:50

The only way we are going to have any inkling as to the size of the contract will be to wait and look at the growth in backhaul at the next quarterly update as this is a three year contract.

[count chris] 19/2/2014 07:36

Shows the company is providing a reliable and professional service IMO. Vodafone must be one of the biggest users of satellite data so plenty of potential going forwards.Avanti Communications Group plcContract win with VodafoneLondon - 19 February 2014. Avanti Communications Group plc (AIM: AVN, "Avanti"), the satellite operator, announces that it has signed a three year agreement to supply 3G IP backhaul services to a Vodafone European company.Commenting David Williams, CEO of Avanti, said: "We are proud to have reached the point where Vodafone has sufficient confidence in our network's quality and flexibility to trust us with this demanding and complex work. We are proud to be serving Vodafone and look forward to a strong and growing partnership".

[divinausa1] 19/2/2014 07:28

Woozle1 17 Feb'14 - 11:21 - 216 of 243 2 0

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
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why would the directors spend near on £1 million on shares a few months back? Im following the directors here....

[gekks] 19/2/2014 07:24

Carry on de-ramping, it's getting quite boring now

[phillis] 18/2/2014 16:33

This a fixed cost business
GM improves as capacity is filled
Sats are underutilised as things stand so the key metric to follow closely is capacity utilisation

It's a bit like Easyjet
Low margin sales first then as capacity is filled prices firm

[megabear] 18/2/2014 09:37

Rogk - Michaelmouse doesn't do numbers. He just does copy and paste of statements by management. When tested on numbers he scuttles away.

[michaelmouse] 18/2/2014 08:09

Rogk

Or the sweet smell of success IMO. ;).

Anyway, I've had a bit of fun. Now I must get on with more productive things.

Cheers.
Michael.

[ttny2004] 18/2/2014 07:41

W1 - when do you offer credit terms to blue chips. Always! Working for a major one and close to accounting function it tells me that you have no idea. Normally 30 days credit after transaction. Obviously effective credit veting is essential before giving credit and regular monitoring of any outstanding overdue amounts before new transactions.

[michaelmouse] 17/2/2014 23:04

Megabear- I notice that you have also had to descend to name calling which is a sure sign that you're losing an argument. The points you are trying to make are not worthy of a response. The name calling just makes you look immature and foolish.

Only time will tell what the future holds for Avanti, but you appear to be getting terribly uptight about a company in which you supposedly have no vested interest.

Apparently, aromatherapy is good for stress levels. Perhaps you should try it? No advice intended.

Michael.

[megabear] 17/2/2014 20:49

Michael – yes they have launched two fully operational satellites. They were always going to either be successful launches or disasters. But the problem is that now they've launched them, they aren't selling the capacity as quickly as anticipated. So you are wrong. The share price performance is perfectly mirroring the company progress, i.e. a big ramp up in the early days, in line with the hype surrounding forecasts and back down to earth over the years as the forecasts have continued to be met with disappointment. This has again happened most recently with the share price falling since the interims on the back of further disappointment against forecasts. So you are the confused one.

In terms of a third party buying assets in the belief that they can be utilised more effectively, yet again you show your naivety. In most cases such as AVN's, a third party will merely wait until administration, when the assets can then be bought for a song. Given the gargantuan debt level and failure so far to generate sufficient cash to bring this down, administration can not be ruled out in the future. By the way, are you implicitly acknowledging that only a third party will be able to utilise the assets effectively rather than the current management? It appears you are.

"The response from our market has been excellent since the launch of HYLAS 1 and we are confident that we can achieve the targets we have set ourselves to fill HYLAS 1 within three years and, under certain conditions, could expect to do better."
AVN HYLAS 1 update from 15th December 2010

"Given that the HYLAS 1 satellite has relatively modest capacity available, we are confident that it will be full within the three years we have forecast. "
AVN Prelims 3rd October 2011

With respect to your point to Woozle1 (W1) on H1 capacity, whether H1 was supposed to be filled out two years ago or not, as you can see above, H1 was certainly expected to be filled by now. And it isn't even half that. Don't forget that ESA is a fair chunk of that capacity already quoted. It seems you have forgotten that. Attention to detail clearly isn't your strong point. I believe that is what Woozle1 was highlighting when referring to 45% filled not 49%. Did you know about the ESA revenue which drops out in April?

Again, further down to W1, re the shelf life, you are incorrect to say that H1 is 49% full less than 3 years after commercial operation commenced. It is 45% filled.

As for your wild assertion on the possibility/hope that H1 could be full by the end of the year, from the interims it is possible to demonstrate that backlog for 2016 has only increased by a measly £2.5m since June 2013. So it don't look likely that H1 will be full by this year end. Maybe in another 3 years?

Do you ever look at the company accounts or just blindly repeat the fanciful stuff that management pours out?

And why do you keep going on about "no advice intended"?

W1 – I did mention earlier that MichaelM is naive. And as you have done already, I would also extend this to being an idiot.

Megabear

[caribbeanrob] 17/2/2014 18:58

Rogk - credit to you for acknowledging the mistake re the sales growth. I may have made a mistake myself in assuming your motives were mischievous rather than just an honest error.

Regards,

Rob

[michaelmouse] 17/2/2014 17:40

Woozle1 - "Re capacity, H1 was supposed to be filled out 2 years ago"

No it wasn't. The H1 satellite was launched in November 2010 with the aim to reach capacity in three years (in fact commercial operation commenced in April 2011). Maths is clearly not your strong point. H1 is now 49% full, not the 45% you have quoted. Read the interim report.

Furthermore, you state "I know they are filling the birds but the gross margin would indicate that they are doing this either at cost or below and that they are extending credit (see the increase in debtors) in geographies with poor credit histories."

This is total supposition on your part. In fact Avanti state that they have offered certain companies "credit terms" rather than price reductions which doesn't fit with your theory on gross margins does it? So far they have only suffered one customer failure (a European customer) and have already made the adjustment to backlog.

"The satellites have only so much fuel and once this runs out, that's it."

Do you know their shelf life? 15 years for H1 which is 49% full less than 3 years after commercial operation commenced. Still plenty of time left to generate some very meaningful income, although I agree that they do need to fill it up in as short a space as time as possible. Of course it could be full by the end of the year. Who knows?

However, since you don't appear to be able to use any factually correct information, I won't be responding in future.

Cheers.
Michael.

[woozle1] 17/2/2014 15:36

I know they are filling the birds but the gross margin would indicate that they are doing this either at cost or below and that they are extending credit (see the increase in debtors) in geographies with poor credit histories. African telecoms have always been profitable but they get paid up front and this is not the case with Avanti. Watch out for unrecoverable debtors!

This statement is true but at what cost? What's the price per MgH?
"We won several million dollars of broadband business in Western Europe from competitors based on quality of service advantages".

Re capacity, H1 was supposed to be filled out 2 years ago. We're now approaching the 4th anniversary and it's only 45% full! As I've said, every day lost can not be recovered. The satellites have only so much fuel and once this runs out, that's it.

The CEO jammed a previous business (Avanti ScreenMedia) with unprofitable contracts because he was impatient to demonstrate growth with disastrous consequences for shareholders (I know as I was one of them and the tax losses have proved useful). I'm not sure that a leopard changes its spots.
W1

[michaelmouse] 17/2/2014 14:48

Woozle1 - My posts always try to strike a balance, and I always state that this is a speculative investment. However, an 81% increase in revenues and improving sales momentum doesn't indicate that they are struggling to fill capacity. Quite the contrary in fact.

Avanti and it's shareholders believe that they will fill the satellites in the not too distant future and others, like yourself, don't.

Success does obviously hinge on selling enough capacity to increase cashflow and cover the debt, and that's why it's speculative, but cashflow is rapidly improving.

Overall, I'm inclined to believe the company will eventually be successful. Certainly they appear to be offering a quality service that clients want:-

"We won several million dollars of broadband business in Western Europe from competitors based on quality of service advantages".

Michael.