Avanti Communications Share Discussion Threads

[gekks] 13/5/2016 16:25

Volume has been relatively huge this week

[monkeywrench] 13/5/2016 14:39

This thread is becoming more and more rivington.
Wish it were riveting.
Thanks for all your warnings guys but how about getting a life ?

[sphere25] 13/5/2016 14:15

There is so much fair analysis on these boards. Anyone who is long or topping up in this company can't say they haven't been warned on the huge risks of dilution or complete wipeout.

Stock once more has failed to hold any bounce and has hit new lows. Get out before it's too late. This is money you simply DO NOT have to lose.

All imo.

[elrico] 13/5/2016 14:11

dangerous - you need to remove the oddity that is $25.1 mil as well. That was nothing more than smoke and mirrors, sleight of hand, creative, call it what you will, but it's not what it seems.

IHMO, AVN should cut capex because they already have unused capacity, firing off another expensive tin can off in to space is just going to result in AVN being sucked in to a black hole in space.

[dangersimpson2] 13/5/2016 12:38

I think they need cash sooner rather than later. Although $162m at 31st Dec 2015 sounds like they are well capitilised it won't go as far as you think.

First they have guided for $100-110m capex in FY16. Given that they only spent $36.4m in H1 then they have a further $64-74m capex in H2. They could of course cut that but given that the vast majority is satellite development unless they cancel a satellite then it is not going to go away.

They will have $32m of debt interest to pay in H2.

Trade payables went up by $25.5m in H1 which should normalise.

This means that effective cash levels will be $30-40m + H2 OCF. They could of course delay capex payments or payables but this only delays payment. It simply becomes a liability for next year.

The big question is what that OCF will be. Even if they hit their revenue growth target of +50% and do $59m real revenue (i.e. no non-cash swap agreements etc.) in H2 compared to $31m in H1 I can't see them generating more than $10m OCF. They would have to hit higher gross margins than they have before to hit the $10m OCF.

Given that they receive payment in an average of 260 days then rapid revenue growth could even be cash flow negative.

This simply won't be enough even in this optimistic scenario. It would leave them with $40-50m cash vs a guided $70m capex in FY17 and $64m debt interest payments. If the cash level is higher at Y/E it will simply mean they have deferred payments for capex etc. and that will simply be another liability in FY17. With FY17 committed payments greater than available funds I'm not sure they could get the accounts signed off as a going concern.

Quite frankly they have too much debt. In my opinion the best thing for all concerned would be a debt for equity swap.

[elrico] 13/5/2016 11:10

The problem AVN have Chris - as Williams alludes, capacity is a plenty and margins are falling by 60%, so how AVN magic 20% never mind 50% I wait with baited breath. I don't doubt AVN have geographical coverage, the problem is sales, or lack of them and those that may come in will likely be low end margin, but how will they appear in the accounts must be a worry. You can bet there will be very little detail.

Don't forget, AVN already have an abundance of spare capacity they have failed to sell over the past 5 years.

[hpcg] 13/5/2016 10:43

For anyone who is long (Weatherman, danger?). Does your thesis require revenue growth in this announcement, or are you willing to wait for future announcements if revenue growth is promised? What about cash?

As a short I will be looking at cash generation. My assumption is that AVN will need to raise money, and it will prefer to do that quickly the more obvious that becomes. If cash is clearly a problem then the share price will drift and dilution increases. If cash generation (or the trend of) is sufficient that they can clearly pay their interest bill and start to eat into the principle then I'll be closing my position. I'm interested in revenue and revenue projection in as much as it relates to cash. If there is no revenue growth shown then I can increase my short as once again a forecast of growth will have been missed.

[chriscallen] 13/5/2016 09:42

Yes, elrico you are right to point out past "misdemeanours" though they have been properly disclosed (or we wouldn't know about them)and independently audited and approved. But what we don't know is what the results for Q3 and Q4 will be. If there is any creative accounting it should become clear - after all there are going to be plenty of people looking for it.

What I do know is that:
a) AVN now have the geographical coverage in place so somebody in South Africa will be able to phone or send data to somebody in Nigeria over AVNs network (A timing accelerated by the much criticised Hylas 2b deal)and that's a good selling point.
b)They appear to have broken into the backhaul market (Vodafone and now BT... who next?)
c)There have been a whole stream of deals that should now be feeding into turnover. I don't believe that it's going to be easy for a new entrant to build a position when they are competing against governments or Quangos. Growing at 50% or more means $100M becomes $150M, $225M, $337.5M in 4 years from organic growth without new contracts... and that's less than the market as a whole is forecast to grow.
d)There is not a lot of Ka band about in Africa though there's plenty of others admittedly. But if they are OK why has FB gone for a Ku band satellite in the short term rather than Ka which would lead naturally into Amos6 which is Ka band. Well I think they didn't go with AVN and Ka because the $2000 was much more than they wanted to pay. Well there's always somebody on the street who will sell something more cheaply even if it's Ku rather than Ka... but only those heading for disaster rely solely on price. When SES did that I crossed them off my investment list. I also now wonder how genuine is FBs mission to those who don't have decent Broadband if price is the decider or is it all about FBs profitability. Incidentally because AVN has the technology and knowhow they say they are still achieving the target $2000 so sales aren't being achieved at the cost of margins.

I could go on but let's wait until Monday and then we can have something to assess.

[aa29] 13/5/2016 09:31

and here's something weatherman hasn't told us about

[elrico] 13/5/2016 09:12

Perhaps that is why drowning in debt Avanti Communications (AVN) has been unable to hit any of its targets and perhaps it is why it is going to run out of cash his year. It seems that the price it can charge for satellite capacity has fallen by up to 80%. Who says so? er...

My attention is drawn to that must read publication "Satellites.com" and the October 2015 Edition of its magazine HERE. Turn to page nine , column one, paragraph one and it is the bombast himself, Mr David Williams pontificating. Taking time out from threatening Bulletin Board posters with lawyers letters for the crime of posting the truth, Mr Williams is quoted as saying that prices have "fallen by 60-80%" over the past few years.

The issue is overcapacity and the gist of the discussion is that this trend will continue. I applaud Mr Williams for his honesty in this matter but wonder why this alarming development and issue about forward earnings has not cropped up in any RNS statement to date? Whilst I read Satellite.com, surely all investors have a right to know about a trend which is likely to send Avanti shares to 0p before Christmas.

Sell. - See more at:

[elrico] 13/5/2016 09:09

Turn to page 9.

The great David Williams, no less, moaning about the slide in the price it can charge for sat capacity.

Euroconsult is forecasting that 2Tbps of HTS capacity will be provided by
nearly 80 satellites, 35 of which are still to be launched.
However if Euroconsult are correct, this is not good news
for the industry, nor for the operators concerned. It is fore-
casting that 65% of satellite capacity will come from HTS
payloads by 2024, but only 25% of the revenue. Neverthe-
less it is forecasting a 22% CAGR for HTS capacity demand,
but only a 1.7% CAGR for regular capacity demand. The
drop in price was echoed by David Williams, CEO of Avanti,
the operator of four Hylas HTS satellites, who said that
prices had dropped 60-80% in the last few years.
“Customers will buy on price, but they will walk on service.”

[chriscallen] 12/5/2016 17:22

Patience. On Monday all will be revealed. As they say frequently on investment adverts "The past is no guide to the future". The shorters may well be right but then again there do seem to be a lot of good quality new contracts not least EE. So I'm off to mow the lawn as it will certainly be longer on Monday if I don't do it now. I wish investing had that degree of certainty.

[elrico] 12/5/2016 16:05

I wonder if any bulls have had the courage to watch the UKI link? There is a classic line from Matt Earl, explaining the share price target Williams famously quoted at valuing at £25 per share, only 3 days later Williams sells over 400,000 at £7. Anyway, I digress....the chap responsible for setting the price target, subsequently left to become head of Globo investor relations. I could be wrong, but I think he is called Tom Shunter. :-)

[tomshunter] 12/5/2016 15:16

That's small man syndrome when losing an argument block your ears or in the this case use the old filter excuse.

[elrico] 12/5/2016 15:13

tomshunter 12 May'16 - 14:55 - 2325 of 2325 0 0 (Filtered)

[elrico] 12/5/2016 14:34

Tomshunter - Evey TW detractor uses the Rivington debacle, you are not unique, it's not a smart move because it's been done time and again, and I have read what Tom and other associated with Rivington have had to say on it. I will say no more, I have made my offer to you, all you have to do is be honest. You are new and adopted another posters position and tactic because he dare not carry on the fight because he was ridiculed and caught in lie after a lie.

This is my last on the subject, so take up my offer in your next post, or I will just filter you, because I will not be distracted from the truth mission I have here, that is your goal, right! Of course I don't expect you yo have the same courage I am showing and be honest, no, you will revert to type and rehash your last post and ignore my offer.

Filter at the ready :-)