Avanti Communications Share Discussion Threads

[rwilliams57] 13/10/2012 10:12

Could it be that AVN have taken a piece of Filiago ?


If that were true you would think they would trumpet it from the rooftops. It makes it all even odder

[buywell2] 13/10/2012 09:09

Re the above

Could it be that AVN have taken a piece of Filiago ?

This could be perhaps a shift in direction of the AVN BOD to gain exposure as a SAT SERVICES PROVIDER to individual end users.

[jeffian] 13/10/2012 00:11

"Avanti has displayed a woeful lack of communication skills with investors. Avanti should have had the common sense to alert the City sooner to its accounting tack, and its shares have been pummelled as a consequence."

Well the FT and I are agreed on that!

"jeffian 11 Oct'12 - 09:30 - 10989 of 11062 edit

.......It seems to me they failed massively on two fronts; firstly in missing by a mile a profit forecast they gave only recently in the full knowledge of the then figures and, secondly, in not issuing an RNS explaining that they were going to change accounting practice and what this would do to the figures. (They clearly took that decision after the Trading Statement and before the Preliminary Results). Basically, they mis-guided the market and they're paying for it now."

[rwilliams57] 12/10/2012 22:24

The FT article here



for those with FT access


has some good things to say about AVN.

However it pillories Williams for not warning investors about its change of accounting policies before the event. concluding that investors would be wise to steer clear of the stock. It makes no mention of any vanishing £9m

It does make me wonder about how transparent AVN actually is. There seems like an awful lot of "jam tomorrow" with a big helping of maybe

[nugacity] 12/10/2012 19:06

Are they in trouble? This is only a few days old!


Filiago offers broadband internet services nationwide
Tuesday 2 October 2012 | 15:34 CET | News
German satellite internet services provider Filiago is now offering services nationwide with a 100 percent coverage guarantee. As well offering satellite broadband services in underserved areas, the company is also offering cable internet connections for both private and business customers nationwide.

[nugacity] 12/10/2012 19:03

Filiago translated section ...... do we own a piece ... I wonder?

ONLY 49, 80 per month

NEW: THE ALL INCLUSIVE PACKAGE
Filiago 10,000 satellite everywhere!

- No one-off costs.
- Includes complete hardware.
- Includes on-site installation service

Save around 590 EUR one-off costs by financing!

Filiago satellite 10,000 kbit / s for m. only 49.80 EUR!

DSL FOR ALL, NOW & EVERYWHERE!

[nugacity] 12/10/2012 18:50

Malcolm ,you seem to be well into pyramid selling! Good luck, they come to pointless end when the mugs run out.

I looked at Telecom and was relieved to get out ... commissions roll down the chains so the early guys are getting rich for doing precious little ... and SC sounds big enough for self-fulfilling predictions to come true. You are shorting a share which would have risen if he and his followers bought instead of short sold.

I was invited to join Telecom as a rep ... needless to say I did not bite.

[wilksey1] 12/10/2012 18:31

here,s a link to filiago web site in germany and its got a avanti logo in the bottom left hand corner


put this on here before anybody says theres no conection between the two

[dunluce] 12/10/2012 17:40

buywell2,

If your research consisted of more than re-posting the work of others and your agenda was not so transparent you may (and it really is still only a 'may')have a little more credibility.

[buywell2] 12/10/2012 17:27

Avanti wins five-year HYLAS 1 deal with Filiago

17 December 2010 | 08:35am

StockMarketWire.com - Broadband satellite operator Avanti Communications has signed a five year deal with Filiago GmbH for satellite broadband services via the HYLAS 1 satellite.

The contract has an initial value of more than �1.3m.

Filiago has one of the largest satellite broadband subscriber bases in Europe and serves a portfolio of residential and corporate customers who can now be offered an upgraded Ka band service with faster speeds and better value.

Filiago has been named 'Best Internet Service Provider' by the German Internet Service Providers' Association for the last three years running.

Avanti CEO David Williams said: "I am delighted that Filiago as a provider of award winning broadband services has selected Avanti as its partner for further growth.

"Together, we will ensure that homes and businesses in areas of Germany without terrestrial access to broadband will be able to get that vital connection to the internet and set another example of how to solve the digital divide in Europe.

"We expect this relationship to become much larger than the first order value. "










BUT





In the light of ......................




Friday, 12 October 2012Avanti (AVN) ... still a space oddity

The loan by Avanti to its customer, Filiago, for what appears to have been £9.1m is interesting. As it is no longer a loan and has been exchanged principally for goodwill and intangibles, the cash has seemingly gone. The £9.3m loan cropped up some time in H1 2011 (calendar year), although at that time Filiago was not cited in name as the debtor; Avanti carried it on its balance sheet as a "financial asset to a strategic partner." The loan was reported to accrue interest at 7%, and in the event that the asset was not fully recoverable over the term of the loan, then Avanti had "collateral over the balance which constitutes 75% of the equity interest in the borrower [Filiago] should there be a default." I find this odd in itself as if a debtor defaults then I would assume the debtor to be insolvent and hence any equity to be near to worthless, particularly if there are hardly any tangible assets, which in this case there were.

When Avanti's 2012 interims were released in February last, Avanti highlighted in its note 9. "Business Combinations/Intangible assets and goodwill" that it had "completed work which enhanced its security over the shares and the business ... The loan continues to carry the option to convert into a 75% equity interest." To me this appears as though the debtor hadn't paid any interest due (or was unlikely to) and so Avanti took control of the assets. At this point, Filiago was still not named as the debtor. Provisional values were attributed to the assets, liabilities and goodwill acquired as follows:




There are several things to note about the assets, liabilities and goodwill acquired:
Trade and receivables appear to have been materially marked down from a book value of £606k to £229k.


Where's the cash? The debtor, Filiago, only had £2k in cash? Where did the other £9,133,000 of the loan go?


A business that has net liabilities of £134k, contributes £330k in revenue, a loss of £81.5k, and seemingly cannot honour its interest payments has goodwill and intangibles (I expect the intangibles are possibly values attached to customer lists) valued at £9,478,000.
Skipping forward to Avanti's prelims update to 30 June 2012, and Filiago is identified as the customer/debtor and some items of the assets, liabilities and goodwill have received fairly material changes to their provisional values:



Trade and other payables are £629k greater than initially thought.


The value of the intangibles (which could be customer lists or software or other) is worth £2,419,000 less than originally determined six months prior. Fortunately the bulk of the difference has been bumped onto goodwill, which is £2,152,000 higher.


There is still only £2k of cash!
I sent an email to Avanti's Investor Relations in early March 2012 asking for some clarity on this loan, specifically asking who it was to, and when it matured. I received no answer. So I asked its house broker, Cenkos. They weren't much help either.
All this seems a far cry from how Avanti described Filiago at the time it won its £1.3m contract in December 2010. Then it described Filiago as "one of the largest satellite broadband subscriber bases in Europe." Somehow, I can't see that.
In summary. Avanti had a financial asset of £9.135m on its balance sheet as at June 2011 and now has what is principally £8.448m of goodwill and intangibles on its balance sheet as at June 2012. Where has all that cash gone?















Does this throw into question the VALUE of some of AVN's clients / contracts ?

[buywell2] 12/10/2012 17:01

VOLS picking up a bit

Should get interesting next week

Have the BOD got any lolly left to BUY more at these bargain prices ?

[geheimnis2] 12/10/2012 16:22

sidam - correct

cawky's point is that some of the loan may have to be written off

without getting too technical it is not much different from saying that there could be bad debts in southern europe

well yeah, i guess there could be but not a major worry unless there is a particular reason to believe that to be the case

[2350220] 12/10/2012 16:11

Who is Matthew Earl?
Has anoone followed his tips before?

Sorry for being ignorant of this poster.
I suppose we all have posters we feel more afinity with, or respect for.
But this is the first time I've heard of Matthew Earl.

John

[geheimnis2] 12/10/2012 16:00

already been posted cawky

the company has been extremely transparent about this already

enough silliness, pal

ciao

;-)

[sidam] 12/10/2012 16:00

I thought I would have my pennies worth. AVN did lend money - I understand to allow infrastructure to be purchased- but the security was changed. Under IFRS that led to effective control, but not ownership. It is substance over form. Under IFRS, AVN had therefore to consolidate the revenues. That is perfectly correct, but yet another problem for anyone trying to understand accounts under IFRS.

That means that AVN will have reported all the underlying revenues and costs. That treatment actually resulted in a worse overall position. As can be seen from the income statement (and the balance sheet) minorities were minus £0.485K. IE that company was loss making. Rather than make the overall numbers better as implied by a few bears, in my view it did the opposite - it made the position look slightly worse.

If I have got this wrong, please let me know - but I think my interpretation is correct.

[simon cawkwell] 12/10/2012 15:54

Gentlemen,

In my silliness, I draw your attention to:



All very odd.

Simon Cawkwell

[geheimnis2] 12/10/2012 15:16

incidentally vendor financing is commonplace in a wide variety of industries

cawky is being silly as usual

i would follow what paul walsh is doing

[gnnmartin] 12/10/2012 15:14

rwilliams57, interesting point. It's hard to be sure quite what has happened.

[jpfd] 12/10/2012 14:32

If someone has shorted a company in the past, allegedly using false or misleading information to enhance their profits, why should they now be considered as suddenly reliable when they announce that they are doing the same again. The agenda is so clear that anything uttered to spread concerns must be discounted.

SC is not a share guru. He is someone who trades and likes to go short and will use nervous PIs to help him achieve his goal by sowing doubt and alarm. His entries on T1ps no doubt serve him well if they result in PIs running screaming for the hills when he mutters that he is shorting company XYZ because someone in the pub told him to. He is no more credible than any other bearish PI on this or any other board, and I choose not to believe anything he says unless independently verified.

[geheimnis2] 12/10/2012 13:07

complete nonsense rwilliams

the matter is dealt with very transparently in the accounts

it is not unusual for companies to provide finance to customers

[rwilliams57] 12/10/2012 13:03

SC points out that Filiagio entered into a contract over some number of years to buy services from AVN. At some time during the contract the company took a loan or loans from AVN, possibly or possibly not to fulfill it's contractual obligations.

If AVN book revenue which is as a result of a loan, well........

Remember this is NOT proven, and may be no more than a short seller's speculation but he says that "the hounds of hell have been unleashed on AVN", from which you might think that there is some investigation under way. It seems to me that notwithstanding whatever rules are in place, recycling money in this way (if it is true, which is anything but proven) is a good way of making it disappear

Here is an extract from AVNs results (from note 7)

On 1 November 2011 the Group took effective control of Filiago GmbH & Co ("Filiago") by enhancing the security over its loans with Filiago.

[geheimnis2] 12/10/2012 12:50

yorgi

i have just emailed you