Avanti Communications Share Discussion Threads

[broadwood] 15/2/2013 09:28

Re-rating continues.

[jeffian] 15/2/2013 09:22

Phew! I can own up to the wife now that I doubled up after the disappointing full year results last October!

[2vdm] 15/2/2013 09:17

Be good to establish support level now . Any views 280p ?

[anusol] 15/2/2013 09:01

it's off, next stop 350p.... :-)
Gonna be a nice weekend

[2vdm] 14/2/2013 18:37

Thanks hpcg. Good points. Personally I am not a believer in shorting, so I find it irritating when someone like SC makes money by rattling a share. To me its a bit like a thug smashing my car window. It's bad enough if he steals my satnav, but when they just smash it for the hell of it, I'm even more annoyed.

Incidentally for those who bother to follow RHPS (and I know many deplore him) here is TB's comment today. Not particularly revealing, but at least his stance hasn't altered in over 18 months:-

"This should be the year when the money starts to drown out the weasel voices of the cynics, as the sheer weight of revenue and profit justifies Avanti's investment in three satellites. Interim results this week showed that the business is well on course, and in the second half of the year Avanti is expected to become 'cash flow positive' meaning, simply, that the amount of money coming into its bank account every month exceeds that going out.

Chairman John Brackenbury reports that Avanti is winning "high value added business at expected prices in Europe as well as emerging markets". While the smaller HYLAS 1 satellite is "almost full in Northern Europe with signs that markets in Southern Europe are beginning to improve", the sales momentum for the larger HYLAS 2 satellite, serving the Middle East and Africa appears to be stronger. "Beams over the Middle East have been quick to sell out... and some beams are almost fully sold with some customers prepared to pay deposits as well as several months' advance payment". Furthermore, Avanti's customers "are expressing confidence in their own growth, with most of them locking into contracts with pre-committed quarterly increases in capacity".

Avanti has already started to sell capacity for its HYLAS 3 satellite, scheduled for delivery at the end 2015, and it should easily be able to pay for this without raising fresh equity finance. Avanti is confident of meeting its targets for the current year, it already has a backlog of orders for 2013/14 and as it moves towards a listing on the LSE's Main Board (instead of AIM) the overall message is that Avanti has delivered two working satellites, has a third on the way, and is well on course to selling the capacity at good prices. BUY UP TO 750p (Today's close: 302p)"

[2350220] 14/2/2013 13:17

Blimey, at this rate I might well break even before Hylas 5 is on the drawing board.

John

[hpcg] 14/2/2013 11:33

2vdm - surely you are confusing the share price action with the performance of the company when these two things can be quite loosely couple or even independent? If you worry about shorters then you care more about what other people do than about the company valuation. I'm not going to claim that AVN would pass a value investment test, so in that sense both long and short are speculating, but from a growth company perspective they are signalling decent quarter on quarter improvement and soon to be increasing amounts of cash inflow.

The primary weapon for short selling is evidence a company is going out of business, or at least running out of cash. Focusing on a company being over valued is extremely dangerous because the market can be irrational on the upside as much as on the downside. SC has been right about some companies and wrong about some companies; long and short. In these cases that has been proven by subsequent events, sometimes over long time periods. The proof is in what the company does, not what it says. So I say let them short; I could usefully pick up some more at this level.

IMO news flow is fine, especially with the move to main market frequency reporting.

[2vdm] 14/2/2013 08:31

divinausal - I'm not disagreeing, but our wonderful bod sold at the top and got in lower, which hardly inspires confidence. I am a LTH and sitting on a big loss with AVN, but continue to hold as I believe it will eventually get there. However, with their attitude to PIs, I hardly feel part of this company. Very frustrated and would be good to get more newsflow.

[jonnib] 14/2/2013 08:04

I posted the other day for someone to put up a chart with any views. Are there no chartists on the thread?

[divinausa1] 14/2/2013 07:53

2vdm 14 Feb'13 - 07:41 - 11828 of 11829 0 0

The problem is that AVN don't keep us informed enough of progress (or delays). Whether this is because there is no news, or they are just lax at doing so is anybody's guess, but it allows SC and others to take advantage of the lack of news. Look at his last bear raid, nothing from the company, he pops up his head and advertises his shorting, shares plunge as others follow his lead and the prophecy becomes self fulfilling. In reality what changed in the company's progress - nothing! Why didn't the directors publish something to counter his raid or buy a big chunk when it went down.
-----------------------

why would the directors be worried about short term movement in the share price i much rather they keep quiet and get on with the business in hand and not pamper to silly PIs that hold a few thousand shares. They speak by buying stock what more should they do. Nothing...

[2vdm] 14/2/2013 07:41

The problem is that AVN don't keep us informed enough of progress (or delays). Whether this is because there is no news, or they are just lax at doing so is anybody's guess, but it allows SC and others to take advantage of the lack of news. Look at his last bear raid, nothing from the company, he pops up his head and advertises his shorting, shares plunge as others follow his lead and the prophecy becomes self fulfilling. In reality what changed in the company's progress - nothing! Why didn't the directors publish something to counter his raid or buy a big chunk when it went down. It would have stopped SC in his tracks. He must be laughing all the way to the bank and I don't believe he got caught in this latest RNS. He's too smart for that and has moved on to blight another company. That's what he does. He's a pariah, but can hardly be blamed and will argue that the company could easily have countered his shorting statement but did nothing. Perhaps a wake up call to the bod, but do they really care about us PIs?

[jadeticl] 13/2/2013 20:19

So the bulls are bullish and the bears remain bearish despite "evidence" that they are wrong (because they refute the evidence). Most must accept the bull's story as the share price is the present indicator (always). The share price may tell a different story tomorrow and next week, but somehow even the most bearish must have a tinge of doubt about their version of the future!

[garymott] 13/2/2013 17:28

Another thing to factor in is the cost base per MHz of capacity. H2 is much lower than H1 (because it's bigger mainly I think) and H3 much lower than H2 (because its piggybacking on the ESA satellite). The amount by which H2 is lower than H1 was published by AVN but I haven't got the numbers to hand. This means the cost of sales will be lower leading to increasingly accelerating cashflow.

[jennis2002] 13/2/2013 16:56

Seems like H1 might not have been as successful as anticipated. I think h2 though will be and it is seemingly being delivered thus far with meaningful numbers. h2 probably offers better technology and also has a bigger target market so was very pleased with the interims, having been worried slightly prior.

the one thing that pleases me, is the government of Singapore's large stake in the co. at 2.80p per share! they are no fools...evil has made enough money by the shorts he has placed thus far, maybe gambled too much though on his last one and got hit yesterday....LOL you cant call a trade right all the time and he clearly got the last one wrong....he will however be successful in doing it again on this share but I would hope/think more like the £4 mark.

my b/e is around 3.10 on this one and am long for the time being...happy to sell and trade the swings however

[anusol] 13/2/2013 16:53

thanks - I was purposefully prudent with my extrapolations, but wanted to get a feel for how realistic the cash positive H2 position might be. Even on my assumptions I was able to hit a positive H2 cash , and I agree with your comments on margins only applying to unpopular beams (which are focused more on HYLAS 1 than HYLAS 2 by the sound of it).
Why don't these organisations publish more forward looking projections in their interims/annual reports? Guess they don't want to be committed/held accountable any more than necessary?

[hpcg] 13/2/2013 16:47

I think you've taken an unknown jump into discount, margin and relative capacity. For example I would expect popular beams to attract a premium (Libya?) whilst only unpopular ones (southern europe?) would need discount support. Making linear extrapolations is prone to error, one is best working from management guidance and then using published capacity usage as a check as to what revenue limits may be.

[anusol] 13/2/2013 16:34

Just trying to figure some numbers out - HYLAS 2 increased AVN capacity by 280% - so would it be safe to assume target income when full was 2.8*£50m? (as £50m quoted above as HYLAS1 target at max capacity).

That would mean target annual income if everything full and at full value would be £140m + £50m = £190 per annum.

Hylas 1 is clearly not at max capacity yet, and appears to be selling some at lower margins (?) but fair to assume £20-£25m annualised income for Hylas 1? Pro-rata the same discount to Hylas 2 (50%) and the Interim note about many beams being sold out, and a customer in every beam, would it be prudent to assume 1/3rd sold in H2 (and no income banked in H1 interim) - so projected HYLAS income in H2 = £140m * 33% * 50% discount(?) * 6 months = £11.5m HYLAS 2 income.

Full Year income = £20m HYLAS 1 + £11.5m HYLAS 2 total = £31.5m.
Net cash outflow in H1 = -£9m on £8.6m sales. Net cash inflow on £31.5m FY would be approx £5.3m.

Analyst predictions for FY income are between £34m and £45m income... above my calc here, but not sure how up to date they are given HYLAS 2 delays.

And cash flow even better as customers paying in advance and cash deposits for some of the backlog.

Am I making any sense, or should I go back to the day job.....

[hpcg] 13/2/2013 15:24

SHANKSAJ - that's the trouble with belief. Wouldn't your odds be better going after a share where the published numbers show the company is in trouble rather than one where the numbers show growth and the Chairman has just made quite a specific statement about cash flow?

Mind you, things are going your way at the moment, it's just got cheaper for you to short but more expensive for us longs to add.

[willessa] 13/2/2013 15:20

H1 I remember was to do £50m a year yet 2 years in is only doing annualised 17m so there is arguments on both sides.

Yes cash flow positive

But maybe the revenue and therefore profits may not be as strong as originally thought.

Also bear in mind they are only up there for 15 years so they need to get a move on!