Avanti Communications Share Discussion Threads

[yorgi] 04/10/2011 21:43

I don't know for sure Cancun but when we were first under a shorting attack the rise in shares out on loan indicated by dataexplorers did correlate. It would surely make sense that people are closing shorts surely as the market cap now is only slightly above NAV and that does not include the value of its orbital licenses. Added to that yesterdays results and news proved AVN our on track disproving the shorters and negative comments from others seeming to want to pull AVN down.

However in the market it may be a while before we see much change in the share price

[cancun tango] 04/10/2011 18:37

Don't know how authentic this dataexplorer's data is, but it'd appear that the shorters are closing positions.....

[jeffian] 04/10/2011 12:20

Sure, BF, but you've got to be brave to catch it! At the point of capitulation, most PI's think it's the end of the world. Actually, it's worth looking at the Oct 07 crash to note that it bounced back pretty sharply after the absolute low and was the start of the biggest bull market ever (not that I see that being repeated in a hurry!)


However, although the market has been pretty dire, we haven't had that crash yet and my point about AVN is that it can go a lot lower yet on market conditions regardless of its fundamentals.

I hold, btw.

[the big fella] 04/10/2011 10:52

Jeff - you say that but isn't that exactly what the market is waiting for, a bit of capitulation so we can turn the cycle?

[jeffian] 04/10/2011 09:47

That has to be right. It's not 'personal' to Avanti; when the Greek sh1t hits the fan, as it surely will, it's going to be October 1987 all over again.

[philo124] 04/10/2011 09:27

My broker says hold off buying anything fwiw.

[level 2 ate my hamster] 04/10/2011 09:17

In Italian, "avanti" is an exhortation to drive a team, or people, ahead. The satellite broadband operator of the same name has certainly made progress in the past year, even if profits have gone "indietro" or backwards, says the Investment Column in the Independent. The pre-tax loss in yesterday's update was only what management had predicted, increasing from £2.4m at the end of June 2010, to £12.8m a year later, and the share price was only slightly behind as a result. The group also announced four new contract wins yesterday, the largest being a $2m two-year deal with Bentley Walker for broadband in Afghanistan. Avanti's pipeline has continued to grow since April. The shares, however, have tumbled and trade at two-year lows. We'd pick up a few, says the Independent, who gives Avanti a buy rating.

[pojscott] 04/10/2011 08:34

Lots of talk etc etc BUT the S/P is on its way down again, just as I feared on Monday! Holding on but should have sold ages ago.

[colva] 04/10/2011 07:10

After yesterday's RNS i think its pretty clear ( unless the BOD are being economical with the truth , which is unlikely given their share buys ) that the upside potential for the share price far out weighs any downside risk .

"Net Assets stood at £207m at June 2011, or 243p per share."

The prices of orbital slots in a recent sale suggest that Ananti's 3 slots could be worth $270m or 174M Pounds , this is not included in the 207m NAV.

With the large upfront capital and long lead time needed for anyone to get into the satellite business, Avanti (at this price) would provide a quick and cost effective way in , it would also look attractive to a competitor , there must be a very real chance of a bid .

[divinausa1] 04/10/2011 01:49

In these markets probably be able to get some under £2 even director buys have a negative reaction on the markets, FDI directors just bought shed load at 17p now yuo can buy at 14p...

[qs9] 03/10/2011 22:15

RIsks yes, but tuck away for a year or so and if it continues to deliver, then IMO this will look very good. Short-term, yes markets weak will mean IMO this remains weak.

[philo124] 03/10/2011 18:34

At least the Directors bought today.

[greyseal] 03/10/2011 16:14

Blimey!!! What happened there?

[jeffian] 03/10/2011 15:59

"DOW positive, FTSE turning up and AIM shares turning down, madness."

Eh? That's "positive" as in "negative" and "up" as in "down", is it?!

8-)

[christianf12] 03/10/2011 15:40

EK didn't mention AVN today. Tom W hasn't yet either. DOW positive, FTSE turning up and AIM shares turning down, madness.

[dodge meister] 03/10/2011 15:39

No comments from EK yet

[argy2] 03/10/2011 15:30

ooops! EK shorting more?

[yorgi] 03/10/2011 13:59

To be up at all in todays market is good. I'm quite sure were it not for the wider concerns of the Euro/Greece crisis then we would quite likely have moved back up to 300p. All the information we have that everything is going to plan and we will have to be patient to see the fruits of our investment.

[garymott] 03/10/2011 13:34

greengiant, re. your post 6870 and 6875 above - the increase in utilisation rate of Hylas 1 from 35.1% to 36.7% is only from 18 April to end June 2011 which is only about 10 weeks. It won't take account of any increase beyond end June. This is not quite so worrying.

[yorgi] 03/10/2011 13:15

Thanks for all those Billy :-)

[billytkid2] 03/10/2011 13:12

Jefffries £13.40 target:

As the company has previously indicated, Avanti reported FY'11 results in line
with expectations. It also announced four new contract wins. Backlog now
stands at £171m and pipeline at £473m, up £4m and £46m respectively since
April. Book value of £207m puts the stock on 1.1x, and this excludes a valuation
of the company's scarce slots and spectrum. The company also announced the
start of Hylas-3 construction fully financed by debt.
As the company has previously indicated, Avanti reported FY'11 results in line
with expectations this morning (Oct 3). Avanti reported sales of £5.46m, in line
with our expectation of £5.4m (cons. £5.9m) and an EBITDA loss of £9.9m, ahead of our
expectation of -£11.1m (cons. -£8.5m). Net income loss of £9.7m was exactly in line with
our expectation and ahead of consensus at -£13.6.
Shareholder equity of £207m implies the stock is trading on 1.1x. We previously
indicated investors should be focusing on price to book. Avanti reported shareholder equity
of £207m, below our estimate of £230m, but shows the stock is trading on 1.1x book value,
a significant discount to the fixed satellite sectors which trades on 3.0x and this is before
including any valuations of the company's spectrum and slots.
Avanti also announced 4 new contracts wins with results. The largest was a $2m,
two year contract on Hylas-2 with Bentley Walker for broadband capacity in Afghanistan. The
other three were shared virtual network operator (SVNO) contracts on Hylas-1 in Poland,
Germany, and Spain. Furthermore, launch +1 year insurance was recently placed generating
a savings of $15m versus budget.
KPIs show good growth. Backlog of £171m was up £4m from the last time they were
reported, back in April, and we estimate £4m of satellite sales have been reported since
that time, implying an increase of £8m or 6% over the last six months. Pipeline at £473m
shows an increase of £46m from April, or +11%. Capacity utilisation now stands at 36.7%
in year three of operation. The company reiterates its confidence that capacity will be sold
out within the three-year target.
Early stage construction work has commenced on Hylas-3 and this will be
financed through debt. The current financing offer is contingent on pre-sales which
are now conditionally contracted for $120m with the company saying they are 'close to
finalising the balance'.

[billytkid2] 03/10/2011 13:09

Cenkos note £23 taget:

Avanti has delivered results for the twelve months to June 2011 that are in line with
our expectations. FY11 was a transformational year for the group with the successful
launch of HYLAS 1. FY12 has equal promise with the anticipated commissioning of
HYLAS 2 in June 2012. Yet in direct contradiction to the progress that is clearly being
achieved, the shares languish at a two year low. The shares currently trade on 9x
FY13 which is a compelling opportunity given Avanti's commanding position in this
high value niche market. BUY
Results in line with expectations
Avanti reported sales of £5.5m and Loss Before Tax of £12.0m. This included three months
of contribution from HYLAS 1 service charges. Sales were marginally lower than the £5.8m
reported in FY10 due to the termination of Ku Band sales in H1. Interest was significantly
reduced as a result of the repayment of the HYLAS 1 PIK bond. Avanti has a strong balance
sheet with £207m of Net Assets, representing 243p per share. The first drawdown of the
EXIM/COFACE facilities has successfully taken place for the construction of HYLAS 2.
HYLAS 1 fully operational
The major milestone achieved in FY11 was the successful launch of HLYAS 1 in December
2010 which is performing ahead of expectations in terms of power and lifetime. The satellite
entered commercial service in March 2011. HYLAS 1 has 75 customers, some of whom are
already reordering. The Backlog (the total value of contracts signed for sale of services) for
HYLAS 1, is £141m. This gives us a high degree of confidence that management will
achieve full utilisation of the satellite within the three timeframe that we have forecast. Sales
to date have concentrated on the UK, Ireland, Germany and Poland, with sales in Spain and
Italy accelerating. We estimate that less than 50% of sales will come from consumer
broadband as Avanti finds increasing demand and new applications in the Enterprise and
Government sectors. An example of this is today's news that a project has started in
connection with the satellite distribution of films to cinemas . Avanti's GVNO software allows
its clients a high degree of customisation and better utilisation of their capacity than any
other satellite service provider.
HYLAS 2 on track for launch in June 2012
HYLAS 2 procurement is on track for Q2, 2012 launch. The Backlog already stands at
£40m, which is in line with the financing plan for the satellite. Crucially 75% of HYLAS 2 is
focussed on high growth emerging markets. The top geographies for the satellite are
Afghanistan, Iraq and Southern and Eastern Africa. Management are in discussions with
major telecom operators who are planning to use HYLAS 2 to rollout large scale consumer
broadband programmes. Management has also incorporated militarised design into HYLAS
2 which puts them in a strong position to win business that they are currently tendering for.

HYLAS 3 begins to take shape
Avanti successfully undertook a £70m placing in June 2010. This was used to retire the
expensive PIK bond which financed HYLAS 1 and also to begin the development of HYLAS
3. The preliminary design has been completed. $120m of pre-sales contracts have already
been agreed in principal and work is on-going to secure further pre-sales. This will facilitate
the drawdown of Export Credit Agency debt which is now in preparation.
Forecasts unchanged
We are confident that Avanti will deliver sales of £29m for the year to June 2012 and Profit
Before Tax of £6.8m. HYLAS 1 already has a backlog of £141m. We estimate that this
backlog covers just under half of the £29m we forecast with nine months of the year
remaining. Many of the 75 customers are already returning for further capacity. We expect
consumer broadband sales to account for approximately £12m, enterprise solutions £10m
and government sales the remainder £3m. High customer demand and limited capacity
reinforces view that HYLAS 1 sell out in three years and HYLAS 2 in five years.
Strong balance sheet gives high degree of flexibility
Net Assets stood at £207m at June 2011, or 243p per share. In addition to this, Avanti has a
user right in three satellite network filings and 14GHz of spectrum. This spectrum enables
Avanti to provide satellite services to South America, Europe, the Middle East, Africa, India
and Central Asia. The value of these licenses was recently demonstrated by the recent sale
of an orbital slot to HNS and Star One giving coverage only of Brazil for £160m. One slot in
this auction went for GBP60m. Avanti has three slots giving prime coverage across far more
territories and potential customers (including Brazil). This implies a value of $270m that is
not recognised in the balance sheet. Furthermore, Avanti has no debt payments or
covenants for the next 15 months giving a great deal of financial strength and flexibility.
Valuation is compelling
Avanti shares are trading on 34x FY12 falling to 8x FY13. This is a compelling valuation for
a business that has only just entered into its first full year of earnings and occupies a
commanding position in a high value niche market. Furthermore, the current price is
underpinned by the Group's strong balance sheet, with a NAV / share of 243p, which does
not even include its orbital licenses. We will be publishing a more comprehensive note
explaining the investment merits of Avanti shortly.

[1356] 03/10/2011 12:49

I agree with you GaryMott that the H2 and 3 will supply the real shareprice catalyst... and things seem positive here with the launch of H2 on course and with the announcement of insurance.

Also, things look positive with H3:

"We have received a preferred offer of highly efficient debt financing to complete the construction of HYLAS 3. The financing offer rests upon the successful pre-sale of significant capacity. We have conditionally contracted pre-sales of $120m, and are close to finalising the balance... We hope to update the market on HYLAS 3 very soon."

Not a time to be out of the share IMHO

[1356] 03/10/2011 12:46

The sign off was very positive, followed by the director buys:

"Outlook

Avanti owns scarce and valuable spectrum resources, in a lightly competed sub-sector of a global telecoms market which is experiencing breakneck growth in data demand through the increasing use of high data applications in government, business and consumer sectors and growing penetration of consumer telecoms usage.

Avanti has excellent differentiation in its products and is winning business at good prices. Our five year business plan is well poised to deliver exceptional returns to investors and there is additional upside for us to be found in completing new projects financed with very efficient debt. Our pipeline of new business gives us confidence in our ability to meet expectations

David Williams

Chief Executive"