Avanti Communications Share Discussion Threads

[waterloo01] 25/2/2012 10:27

Lost more money on RHPS tips than any company I've EVER invested in. Cancelled sub moons ago. The fact he can get so many companies SO wrong makes him no better than a child with a dart.

[sg31] 25/2/2012 09:43

I don't mind what he does...it's the fact that he isn't very good at it that I dislike. If you pay a subscription you must think it is worth the money. Each to their own.

[colva] 25/2/2012 05:45

There is a "conflict of interest" issue with TW in that he has "corporate clients" (companies that pay him fees for services) , he also has subscribers who pay for his advice (tips), so when he puts a buy rec on a client company his motives are questioned , but to be fair he does make it clear if a company he comments on is a client.
I think the fact that he puts buy recs on stocks that he holds in his funds isn't an issue . He's put a lot of his own cash into his funds so if he has the confidence and belief to invest in a stock i see no reason why he shouldn't recommend that stock to his subscribers , there are rules regarding front running and the like so as long as things are transparent i think it's a case of , you pays your money and you takes your chioce .

I should add that i am a subscriber to T1ps.com

[waterloo01] 24/2/2012 17:31

my mistake. Was researching ANO where they are and got my wires crossed. Edited above

[waterloo01] 24/2/2012 17:14

As Tips and it's associates are a shareholder in AVN, it's a little 'rum' shall we say that they also tip them in their rag. I hold AVN and can see some great value, but.......

[colva] 24/2/2012 17:11

TW comments on every RNS that AVN put out and always adds a "strong buy" rec, so i was expecting the T1ps fund to take some shares in the placing but it looks like they didn't, though he said today that he'd met with the company and that the fund would be increasing it's holding.

[lazyj] 24/2/2012 16:59

Can anyone help me understand why there continue to be significant sales at this current price?
Enjoy the weekend break.

[sg31] 24/2/2012 16:52

I was expecting certain posters to post his comments...

Why would they, the guy has zero credibility.

[eugene4] 24/2/2012 16:19

Nobody noticed TW fund buying more of these.I was expecting certain posters to post his comments...

[shazbo] 24/2/2012 16:05

I too have been severly burned on this share but do have faith that it will turn. I have some cash to invest and need to average down but just not sure when to make the leap, have never been very good at catching that falling knife. Sensible to wait a couple of weeks in the hope that things 'settle'?

[rogerbridge] 24/2/2012 14:46

Well my holding here is down 15% but I think we are about to turn , so I have bought some more this afternoon

[restassured] 24/2/2012 12:52

Nice to see a Sovereign wealth fund take a meaningful stake.

[1356] 24/2/2012 12:44

nice to get a chance to top up below the price paid by the big institutions in the placing... doesn't happen often for PIs, make the most of it...

[cancun tango] 24/2/2012 12:38

The timing suggests they took part in the placing.

[colva] 24/2/2012 12:38

volvo,

placing shares

[volvo] 24/2/2012 12:22

just need to find out who sold them.

[backmarker] 24/2/2012 11:54

that's a prestige investor to have.

[waterloo01] 24/2/2012 11:27

Govt of Singapore?

[gekks] 24/2/2012 11:05

Sucker that I am - bought some more - and have been doing all the way down from £6 .....

[volvo] 24/2/2012 10:01

Thanks billy, like I said 600p by the time Hylas2 goes up and 2000p by the time Hylas 3 is launched imo.

In the funny old world of finance strange things can happen.

..........like a cheeky offer.

[billytkid2] 24/2/2012 09:14

From Charles Stanley on the 15th:

Avanti Communications Group
Share Price: 282.5p
Market Cap: £316m*
(AVN.L)
Higher risk as pre-profitability and traded on AIM (projected for Official List in 2013)
*Includes shares to be placed.
Placing and HYL 3 etc.
We have had a Strong Buy opinion on AVN since we initiated full coverage at 480p in
April 2010. Since that date the performance of the shares has been volatile and also
disappointing in that the current share price is well below that earlier level despite
considerable progress in building a satellite fleet. However, we consider that the
potential value of the company is still substantially higher than the current market
capitalisation and we reiterate our Strong Buy opinion.
The company has recently announced a placing to raise approximately £75m in order to
fund a third satellite HYLAS 3. This will be by way of a partnership with the European
Space Agency (ESA) on a shared satellite. The ESA will use their part of the satellite for
scientific purposes. We understand relating to global warming. Avanti will have some
4GHz of Ka band capacity on the satellite. There will be no debt and management states
that there will be no additional operating expenditure associated with this capacity. The
satellite will have capacity equivalent to 1.33 times that of HYL 1. This appears very
attractive as the cost per GHz is low compared with the other satellites.
Capital Cost Comparison
HYLAS 1 HYLAS 2 HYLAS 3
Projected Cost £m 123.2 280.0 75.0
GHz 3.0 8.3 4.0
Cost per GHz £m 41.1 33.7 18.8
Source: Company presentation
Given the size and the economics, we would anticipate that HYL 3 should create greater
value that HYL 2. However, we have not discussed full projections with management
and are therefore using their projection of incremental value of 160p as of today. As that
value is DCF based, it should increase as the launch date in 2015 draws closer and the
discount factor starts to unwind. But our gut feeling is that management has been
conservative.
HYLAS 1
Management has indicated that this satellite could generate revenues of £50m pa when
fully utilised with a target of three years from launch. This is higher than we had
projected. On the assumption that our models are correct, it would imply a DCF value of
240p for this as at June 2012.
HYLAS 2
There has not been an increase in revenue guidance and there is unlikely to be any at
least for one year – if at all. However, launch was projected for June 2012 with full
capacity utilisation within four years. Management indicated that HYL 2 should be at
cash flow neutral from launch with a 16% usage rate. Those numbers do not change our
estimated DCF values except for per share values which have changed as there are
more shares in issue.
Interim Results
The interim results are still rather meaningless as all revenues are generated by HYLAS
1 and that has only just started to ramp up. However, that satellite was operating at
close to cash flow breakeven and we estimate that the Group will generate positive
EBITDA for the year to June. That said, management indicated revenues of £17m for
this year, which is marginally lower than our previous projections for HYLAS 1. But that
has been significantly outweighed by projected revenues of £50m pa to be reached when
capacity is fully utilised with a three year (June 2014) target. If this year's target were
reached, it would imply almost £12m of revenues for H2 which would be £24m
annualised equal to almost 50% of new target revenues. That gives significant comfort
for future results.
Croesus 15 February 2012
Page 2 of 5
DCF Values
As HYL 1 is now projected to generate higher revenues than we originally anticipated, we have reworked the DCF values for that satellite, but used the increased share capital. We have not changed the calculations for HYL 2 except to dilute the value for the additional capital. We continue to value each satellite separately, but charge all central costs against HYL 1. We now have the following projected values. We have not calculated a value for HYL 3, but have used management's guidance of an incremental 160p per share (220p including cash raised). However, we do consider that this value could be significantly low.
Projected DCF values per share Satellite Cash Total
June 2011
240p
140p
380p
HYL 1
June 2012
930p
60p
980p
HYL 1 & 2
June 2013
1285p
20p
1385p
HYL 1,2 & 3
Source: Charles Stanley research projections
The result is a very small reduction in total value due to a reduction in our projection of HYL 3 value.
Summary, General and New estimates
Although we have not included the table given in our last note which compared Avanti with its UK listed or trading competitors, both of those have market capitalisations which stand at a significant premium to the book value of their satellites. We estimate that AVN's current market capitalisation is still, allowing for the new capital, at a significant discount to its projected satellite book value as at June 2012. We think this anomaly should disappear when the Group moves to the Official List (Fully Listed) in, probably, late 2013. In the meantime, the shares stand at a discount to our projected value of HYLAS 1 and cash.
We still consider that Avanti will develop into a significant satellite operator. Although the shares are likely to stand at a discount to theoretical values, there appears significant upside for the shares on a one year view. In addition, the valuation ratios look quite low in comparison with their peer group in terms of projected PERs when the AVN satellites are more mature. We reiterate our Strong Buy opinion.
We give our new estimates in the table below.
Year to June 2011A 2012E 2013E 2014E
Revenues £000
5,462
17,000
77,400
117,000
EBITDA (loss) £000
(10,556)
4,500
58,625
97,945
PBT (Loss) £000
(12,727)
(3,750)
19,997
61,197
EPS p (loss)
(12.1)
(3.4)
15.4
51.1
PER
18.3
5.5
Source: Charles Stanley Research Estimates
Analyst: Robert Corden
The author of this comment, namely Robert Corden, has a personal account position in the shares of AVN.

[yorgi] 24/2/2012 08:55

I agree Julcester.

[nightspot] 24/2/2012 08:39

Juice, I agree with you. If there was something amiss with the business, the DD the institutions would have performed before participating in the placing would have uncovered it.