Avanti Communications Share Discussion Threads

[hpcg] 20/5/2016 12:08

Copyright 2016 Edison Investment Research Limited. All rights reserved. This report has been commissioned by Avanti Communications and prepared and issued by Edison for publication globally. All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report. Opinions contained in this report represent those of the research department of Edison at the time of publication.

blah blah stuff about countries

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[elrico] 20/5/2016 12:02

AVN can pay for as many reports as they want, the market has lost faith in the management here, 6 years of failed targets, failed strategy and a debt mountain that has a stranglehold on a company that is tagged as a growth company with spare capacity near 70% with sliding margins that prompted Williams to comment on in an industry mag, yet he seems no reason to mention a material issue to investors through official channels.

[seball] 20/5/2016 10:36

427p price target
Avanti has reported Q3 trading that not only allows it to maintain its guidance for revenue growth, delivering a positive EBITDA in Q3, but clearly indicates a path towards free cash generation. With contract momentum building with high quality customers, recurring revenues are growing, satellite capex is almost complete and the financing facilities nearing finalisation appear more than sufficient to execute the plan. As this progress becomes more widely appreciated, we expect the share price to be released from its shackles and start to trend towards cash-based fair values. Our own capped DCF still returns a fair value of 427p per share.

[elrico] 20/5/2016 09:59

When a company seeks to censor this is an obligation to short...EK!

[chriscallen] 20/5/2016 06:48

I don't know because it has completely gone from my past postings as if it had never been.

[jeffian] 19/5/2016 23:01

Is it ADVFN or is it yorgi?

[chriscallen] 19/5/2016 22:09

I'm not sure why it has been moderated and it has been deleted from my postings so I can't check the precise wording of what I posted. It seems ADVFN don't believe in free speech so what else are they suppressing?

[hpcg] 19/5/2016 16:57

I saw chriscallen's post 2405 and I'm not sure why it has been moderated. Indeed I think it was probably a reply to my post 2404 rather than the person it was nominally a reply to. I didn't agree with it but it was only an expression of opinion.

It is quite possible that AVN could grow its revenue sufficiently become a successful company. Factually it hasn't done so yet.

[elrico] 19/5/2016 16:41

Will do :-)

[hpcg] 19/5/2016 15:51

seball - so why isn't AVN at cash break even? Nothing in post 2402 is new. All of it has been the case in Europe since H1 came in to service and AME since H2 came in to service. All of it. Not a single thing has changed.

GlennPaul - you observation would be consistent with recent widespread PI losses here and across the pond in the energy space. There is a class of PI which is blind to debt.

[weatherman] 19/5/2016 14:40

So the Gov is committed to extending broadband....

[seball] 19/5/2016 14:03

Thanks to another poster on another bb.

When does AVN reach cash break even
"One of the most-watched market developments in the commercial satellite telecommunications market today is these new high-throughput satellites’ effect on traditional satellite capacity.

Eutelsat on May 12 issued a profit and revenue warning that was based in part on evidence that competitors’ high-throughput satellites were taking future business away from Eutelsat’s conventional widebeam satellites for certain data applications. “Market demand for high-throughput Ka-band satellite capacity across EMEA [Europe, the Middle East and Africa] is strong,” Avanti said. “Avanti continues to secure new high-quality customers, particularly in the large telco and government sectors, where sales cycles are long but contract value is high. “This success is being driven by either migration from more expensive and lower-capability legacy systems, or the ability of high-quality Ka-band networks to grow the market for new satellite applications,” Avanti said.

Operators have said high-throughput satellites should be judged by a new set of key performance indicators, and that satellite fill rate is no longer a relevant metric. Avanti, for example, has said for the past year that its fleet is between 25 percent and 30 percent full – a level that conventional satellite operators would view as intolerable. For these businesses, a fill rate of 75 percent or higher is the goal."
hxxp://spacenews.com/avanti-promises-revenue-acceleration-new-ka-band-over-europe-by-june/

Edison in their report dated 4th February 2016 pick up on this point "An average fill rate of c 40% on HYLAS 1 and HYLAS 2 is needed for cash break-even before capex, which we expect to be achieved by the
end of FY18." (www.edisoninvestmentresearch.com/?ACT=18&ID=15771)

Edison again in their later report say that they believe that Hylas 3 expenditure is now mostly complete and that Hylas 4 is 80% complete. (

So if the analysts are correct AVN does not need 75% plus fill rates but only 40% for cashflow breakeven. On recent performance they should be achieving this capacity level in about 12 mths. The Edison report could not have anticipated a win of the size of the EE contract hence their later date.

By cashflow breakeven I mean that they are covering all outflows including interest. This is of course not suddenly achieved on day 365 as they will build towards it from day 1. The importance of this is that operational cash outflows should start dropping now and Q4 results should show this happening. If this is so the share price could move substantially from present levels as the market wakes up to the fact that AVN is actually disrupting the traditional market as it operates on an entirely different cost model.

[glennpaul] 19/5/2016 14:00

Lots of PI size purchases, overwhelmingly so but price not going up. Suggests some big back door sales going on?

[bwakem] 18/5/2016 18:53

weatherman have you seen the debt?

[weatherman] 18/5/2016 17:39

Avanti could become a takeover target given the length of time and cost for rivals to transition to Ka band.

[elrico] 18/5/2016 17:04

Estienne - shareprophets....all one word :-)

They don't need to know anything about the satellite business, they could confuse AVN with a corner shop. The facts are that AVN are burning cash, drowning in debt, miss their own matrix, high capex, unsold capacity, huge pricing pressure, failed management, management that adopt creative accounting. These are facts in the public domain, some people chose not to see them and or unable to work it out for themselves. Did I not say there would be a brief buy shallow spike on news on Monday and did I not say it would not last. Call me a prophet, I am not, I just know how Williams works and true to form he tried to give the shares a lift when he realised his smoke and mirrors RNs was not going to fullfil his ambition, so he along with his partner offered nothing more than a token gesture by buying a few shares with nothing other than beer money when you compare his monthly salary.

bs76 - "I haven't seen funds like JP, GSA or Ennismore giving up so easily."
There is nothing these funds can do when borrowed stock is called back, they have to close their positions, this results in a brief rally while shorts positions are closed, then the shares continue the trend downwards because the institution requesting their stock back unwind their long position, which is exactly what we have been seeing for months now. Ever wondered why AM is blue and late afternoon is red? Think about it.

[seball] 18/5/2016 07:56

iWayAfrica Extends Contract
Avanti Communications Group plc (“Avanti” or “the Group”), a leading provider of satellite data communications services in Europe, the Middle East and Africa, announces a contract extension with pan-African broadband provider, iWayAfrica until March 2018.

The extension relates to a contract for services using Avanti’s pre-packaged SELECT product, which provides Service Providers, such as iWayAfrica, with fast, affordable satellite broadband to help bridge the digital divide.

The strong relationship between the two companies has enabled significant growth for iWayAfrica over the last 18 months. Coverage from Avanti’s HYLAS 2 satellite provides high quality broadband services to iWayAfrica consumer and small business customers across Sub-Saharan Africa.

Avanti’s Ka-band satellite technology will also provide a reliable, flexible platform for iWayAfrica as it extends services into other parts of Africa in the future.

Mathew Welthagen, Chief Executive Officer of iWayAfrica, commented: “High levels of customer satisfaction and a great user experience are fundamental to our business across Africa. Avanti’s high quality, flexible Ka-band satellite technology provides us with the broadband services that we need to achieve this, and extend our business into new countries to enable growth.”

David Williams, Chief Executive Officer of Avanti, said: “Strong partnerships, such as the one between iWayAfrica and Avanti, are the foundation for robust, growing businesses and satisfied customers. The contract extension with iWayAfrica to provide Avanti’s high quality, flexible broadband services across Sub-Saharan Africa is testimony to this partnership.”

[bs76] 17/5/2016 22:26

Jaknife, thanks for the elaborate response. I'm new to AVN and have no position yet. just trying to figure out.

I still believe that money spent by a company on buying or building any new asset which will produce income in the future is not cash burn. The argument can be about the asset whether that will produce enough income to justify the cost.

In this case you don't believe that hylas 3/4 will generate much revenue which might be a fair point considering the pricing pressure but if that was the case then why there is no short over 0.5%. I haven't seen funds like JP, GSA or Ennismore giving up so easily.

and last point - bond interest rate is not 20%. It's the yield. AVN is paying 10% coupon. I have no doubt that debt has to be refinanced but they have time till 2019. If AVN survive till then it can easily be refinanced on favourable terms.

and I still need answer for this query - "how much out of $122m will be left after HYLAS 3/ 4 satellite's completion? and will that be enough for the time period before they start getting revenue from HYLAS 3/ 4 ?"

[seball] 17/5/2016 22:15

Bloomberg Research
This appears over the weekend



It appears to explain why AVN is different to other operators and contradicts many of the bloggers 'strong' arguments.