Avanti Communications Share Discussion Threads

[greengiant] 21/10/2011 08:15

Chris,

You are quite right, lyngsat always quotes American based dates so launch is scheduled for April 2012

gg

[chris stevens] 21/10/2011 08:12

I read the launch date 1204-06 as being between April and June 2012, where there was a firm launch date they seem to quote it backwards YYMMDD e.g. 120406.

[yorgi] 21/10/2011 07:50

Quite clear launch date 6th April not June, so AVN on target Q2.

EDIT

Yes on reflection it looks to mean between April and June quite right Chris

[superg1] 21/10/2011 07:25

Here's where I got the launch date from. Perhaps something to keep an eye on for those interested.

[mjames20] 20/10/2011 17:29

Just received my annual report today. The Directors are certainly upbeat about revenue expectations:

"The business plan is to fill Hylas 2 by 2017 but the pre-sales activity suggests that we will beat this target by a long way"

"Hylas 1 operates in a lightly competed market place and we continue to achieve pricing in excess of our base case"

So ahead of plan in terms of both pricing and revenue.

[jonnyno1] 20/10/2011 12:43

delays? save for a couple of months on initial launch i would say the board have been very good at keeping the market informed. I would say that they have always been very conservative and never over promised. plus they put there money where there mouth is. my one criticism is they do not speak to PIs but even that has its pros and cons.

and to pre-empt my friend sg the share price did get ahead of itself. but now looks great value.

J.

[cancun tango] 20/10/2011 12:32

Chart looks poised for breakout and could have a timely coincidence with a head and shoulders on the loaned stock chart provided by dataexplorers.

Good news to see a confirmed launch date. I hope the company keeps the market fully updated on any slippage. As a shareholder, I've previously lost confidence in AVN, and sold shares, due to finding out about delays from this thread rather than directly from the company!

[garymott] 20/10/2011 09:26

sugerg1, for many months all communication from AVN has stated Q2 2012 for launch of Hylas 2 and so I don't know where you got June from. Therefore it should be in service in Q3 not Q4 (possibly even early in Q3).

Also I don't agree with your view of 40% full by end 2014 (presumably based on 2 years into the 5 year target to be 100% full). AVN is targeting 25% capacity contracted at launch (which it targeted and met for Hylas 1).

Assuming a linear fill rate following launch (which was your analysis above) by end 2014 this would give 2.6/5 = 52% + 25% target capacity at launch = 77%. So I don't particularly think the 70% full posted by Gorvachof is a bit 'hot'.

[geheimnis2] 20/10/2011 08:04

Viasat-1 is very important I think because it will prove that the demand in the US satellite broadband market is strong. And that should have good positive implications for the European counterparts, Eutelsat and Avanti," said satellite investment analyst Henrik Nyblom from Nomura in London.

[polythene] 20/10/2011 07:16

Broadband ginat heads skywards.

[superg1] 19/10/2011 19:29

Apologies GORV it looks like April is the launch month

1204-06

Hylas 2 Ariane 5 or Soyuz Kourou 33.5°W 24 Ka tps S Günes
100524

[superg1] 17/10/2011 08:40

Gorv

Thanks for that. generally I thought such predictions were supposed to be on the conservative side, but that one seems a bit 'hot' to me.

Hylas 2 launches June 2012 so prob Q4 for on line. So it would be 2 years into it's 5 year target. I'd be surprised if Hylas 2 was 70% full after 2 years. Strictly speaking 40% full, if they keep on target. Still good profits but nothing like the prediction.

At a 15 PE The current price covers £17m profits.

It all relies on contracts of course and how well capacity is filled. The run up to the launch of Hylas 2 will be a good indictor.

Still the Hylas 3 funding to be clarified.

[gorvachof] 16/10/2011 14:15

I believe they they can get more £perGhz for Hylas 2, all being well they would then be commanding a lot more credibility and increased profile.
Still with this in mind I agree at £111m, revenue would have to be IRO £150m possibly £170m?
Hylas 1 - £45m, so assume full revenue for Hylas 2 alone £175m, launching Q2 2012, in service Q3 with 25% target, so possibly 70% full on its second full year YE 2014 so £120m? (excuse typing as I think) total revenue £165m, massive targets imo, but thats why they have the price targets they do.

Interesting article here with words from DW.
www.walesonline.co.uk/news/wales-news/2011/10/12/experts-call-for-a-brake-to-be-put-on-ferrari-fast-broadband-91466-29579486/

[superg1] 13/10/2011 21:05

Sorry Colva

colva - 7 Oct'11 - 09:51 - 6971 of 7006



cue superg !

I only just spotted that £111m to June 2014.

How do they calculate that Colva. They would need a revenue in excess of £150m from June 2013 to 2014.

Hylas 1 3 years to fill(2014) and Hylas 2 5 years (2017). I'm not arguing but what are the full revenue expectations for a full Hylas 1. I take it on a capacity basis Hylas 2 will get at least 3 times the revenue of Hylas 1. Any clues ???

[yorgi] 13/10/2011 20:45

From T1ps Growth Fund Newsletter October


On Monday 3rd October 2011 satellite operator Avanti Communications released its prelims for the full year ended 30th June 2011. The results cover a landmark year for the company, which saw it successfully launch the first of its three satellites, HYLAS 1, and subsequently begin generating revenue from it. £5.46 million of Revenue was reported for the year, which included only two months of HYLAS 1 sales. The first depreciation charge relating to HYLAS 1, now being fully operational, was also felt in the P&L. The inevitable loss from operations came in at £12.86 million which was almost bang in line with expectations.
Chairman, John Brackenbury noted that; Avanti's senior management team has faced a difficult period, as some short term speculators attacked the share price. I am concerned that loyal, long term shareholders, especially private investors who are not allowed by law to receive the detailed reports produced by investment banks, have experienced temporarily diminished value, perhaps without a clear understanding of how this has come about. But it has not changed our approach to our business model at all. We have set out a five year business plan to fill our satellites. Our products and geographies are exhibiting very strong demand and I am satisfied that in the first commercial year of this plan we are achieving our objectives.
During the year the expensive PIK bond was refinanced and the early stage design work for HYLAS 3 was funded. In addition to this, with the construction of HYLAS 2 now well underway, investors can feel comfortable that the debt financing used is fixed at an attractive 5.5% rate, and is repayable over a seven year period from December 2012. HYLAS 2 itself is still set for launch in the first half of next year but with HYLAS 1 now fully operational the company has seen a material increase in the number of customers signing contracts and the depth of its order book. Now that it has one operational satellite the company has found that it is carrying more
weight within the industry and attracting more potential new customers. As a result the company is increasingly confident that it will fill its capacity on board HYLAS 1 within the forecast three year period. Given that the company has already sold 36.7% of capacity we take the view that this may well be an undemanding expectation.
During the year the HYLAS 1 customer base was extended and the company has now sold capacity to more than seventy providers in Europe but has found that its customers have initially only committed to a small amount of bandwidth, which it is confident it can ship out in the short term. But promisingly it was also noted that the company is already seeing that some of its customers, which took capacity pre launch, coming back for more. As at the year end, despite taking some to the P&L for the year just gone, the back log of contracts for HYLAS 1 alone increased to £141 million.
Moving on to HYLAS 2, construction is progressing well, and as we noted above, it is fully funded and set for launch in Q2 of next year. Avanti stated that pre launch interest has been strong and given that the satellite will focus upon a far less developed area in terms of broadband than Europe, the company is confident in its outlook. As at the year end the HYLAS 2 backlog stood at £30 million. In addition the options over capacity for military use increased to £170 million (Avanti is currently not regulated to sell directly to the military but it provides it service to contractors who are).
As at the year end the combined pipeline for new business for HYLAS 1 and 2 stood at £473 million. That is to say that as at the yearend the company had identified potential contracts, where a proposal had been made, worth £473 million in Revenues. The demand for the company's offering was further highlighted following the release of the results when the company delivered news of four new contract wins which were signed the Friday before the prelims were announced. There is currently just the one Ka band competitor in the markets the company either operates within, or plans to, and the company provided a comparison dating back to the 1990s when only BT and Racal were competing in the UK mobile phone industry. Our view is that competition in the company's market place is not intense and services can be easily differentiated. The company also noted that every satellite has different characteristics which substantially alter the suitability for customers and that it firmly believes it has a strong competitive advantage in several areas of its market.
Avanti's accounts showed that net tangible assets at the year end were £225.7 million, which at 283.375p, capitalising the company at £240.9 million, means the shares currently trade at a crazy price given Avanti's obvious growth prospects. It is not difficult to explain then why, following the results, the key management stepped in and snapped up a bunch of stock (again!) given that the five year business plan is poised to deliver as forecast. Our view is that, as a result of the speed of growth in the global telecoms market, demand for the company's products is only set to grow. With a valuation of 420p attributable to just the value locked within HYLAS 1, the company is evidently undervalued. Looking at all 3 satellites we remain of the view that 1400p (at the very minimum) is a fair price.
James Faulkner

If you have any questions about investing in the SF t1ps Smaller Companies Growth Fund please contact Sarah Read on 01624 641 318 or email [e-mail]. If you would like a simplified prospectus and an application form please visit our website at www.t1psim.com or email [e-mail].

[yorgi] 13/10/2011 16:57

Yes it is but is that anymore so with AVN than with any other stock ?

Although generally accepted that we have been subject to sustained shorting here but whether that bears any relevance to that I wouldn't know.

[monkeywrench] 13/10/2011 16:52

It's hard to compete !

[yorgi] 13/10/2011 16:46

Your point being Monkeywrench ?

[monkeywrench] 13/10/2011 16:27

It's hard to compete !

[yorgi] 13/10/2011 12:43

Jeffian,

Those that understand AVN know it and there are those that don't and don't wan't to.

[jeffian] 13/10/2011 12:35

Matthew Palmer,

"look at the PE and forward PE far too high for a loss making company"

Yes, but it rather depends how far forward you look! On 2013 estimates it's on a PER just over 20x continuing to fall rapidly thereafter if - IF - it hits target earnings. Those who buy the story believe it will be not be loss-making and with earnings growth justifying such a high PER whilst it is still at the development stage. One can understand why the current market is spooked by lack of earnings, but if they meet forecast, you won't be able to buy it at this price when the cashflow is visible. You pays yer money and makes yer choice.

[yorgi] 13/10/2011 12:19

Until the market in general turns bull again and it will, we will probably mark time around here until we have news of progress on contracts won for H1 and H2. Any updates on confirmation of launch of H2 could also give us a boost.

[yorgi] 13/10/2011 12:04

Lack of understanding quite clear.

[matthew palmer] 13/10/2011 11:50

Sorry disagree - look at the PE and forward PE far too high for a loss making company

[colva] 13/10/2011 04:56

Don't know whats going on , the "official" AVN board is like the Mary Celeste and nothing new here either .


I met a bloke in Yorkshire the other day. I knew he was dyslexic as soon as I saw him. He had a cat flap on his head.